Clean Coal Technology

Lord Ezra: asked Her Majesty's Government:
	What further initiatives they have in mind to promote the application of clean coal technology.

Lord Davies of Oldham: My Lords, the Government will publish the carbon abatement technology strategy for fossil fuels on 14 June. The new strategy sets out our plans to support the development of these technologies, including cleaner-coal technologies.
	The House will also know that, in his Budget Statement, the Chancellor of the Exchequer announced that, as part of the Climate Change Programme review, the Government would examine how they might support the development of carbon capture and storage technologies, including the potential for new economic incentives.

Lord Ezra: My Lords, I thank the noble Lord for that encouraging response. Does he agree with the statement recently made by the Council for Science and Technology that fossil fuel generation with carbon capture must play an increasing part in future energy policy? That is made all the more important by the prospect that there will be a great development in fossil fuel firing of electricity generation throughout the world in the coming years. Unless there is some way in which the carbon can be captured, that will add enormously to the emission of carbon. In those circumstances, will the proposed report to which the noble Lord referred include sufficient funding to enable us to move from research and development to the establishment of effective plants to see how the process can be carried out commercially?

Lord Davies of Oldham: My Lords, I am happy to agree with the noble Lord's opening points, which he made with all the authority that he brings to the subject. It certainly is important that we pursue such strategies because, as he rightly suggested, they are bound to play a significant role in controlling emissions in the future.
	The noble Lord cannot tempt me, however, to pre-empt the Statement to be made by my right honourable friend in the other place next week. Suffice it to say that that Statement will, I am sure, meet with the broad approval of the noble Lord and the House.

Lord Tebbit: My Lords, the Minister will know that, when comparisons of cost are made, it is customary to add to the cost of nuclear generation the cost of the disposal of nuclear waste. Can he say why it is not customary, when considering the costs of fossil fuels, to add on the cost of disposing of the carbon dioxide waste that they produce? It might make for some interesting cost comparisons.

Lord Davies of Oldham: My Lords, the noble Lord will be all too well aware, as will the House, of the particular costs involved in the disposal of nuclear waste. That is why there has, for the past seven or eight years, been a committee to examine the technology involved in that very difficult problem. The costs of any form of energy generation are bound to be included in the equation, but I am sure that the noble Lord will recognise that the nuclear industry presents a particular challenge.

Lord Redesdale: My Lords, the Minister has made much of the amount of research and development that has gone on, but can he say how much the Government have committed so far to research and development in clean coal technology?

Lord Davies of Oldham: My Lords, we have contributed in two respects. We have given some support directly to development in this country, and we are involved in collaboration with the United States on projects concerned with the advancement of the technologies.
	As the noble Lord, Lord Ezra, suggested, there is great potential for such technology in dealing with the emissions of a most important resource. We all recognise that, although British dependence on coal has been significantly reduced in recent years, the economies of many other countries, including some of the biggest economies and largest consumers of coal, will benefit enormously from the successful development of such strategies.

Lord Swinfen: My Lords, in replying to my noble friend Lord Tebbit, the Minister concentrated on nuclear energy: he did not answer my noble friend's question about why the cost of disposing of carbon dioxide was not included when costing coal technology.

Lord Davies of Oldham: My Lords, it is because pollutants are part of our target for reducing emissions that we do not need to make a special issue of cost. The costs are built into the pricing of fuels.
	The key issue with regard to clean coal technology is how to get sufficient investment in the development of a strategy that will make the burning of coal viable. I am sure that the noble Lord will recognise that it is because we have been dealing with nuclear technology for many decades that we have had the build-up of a particular problem with the disposal of nuclear waste. That is why the costs relating to the nuclear programme are so significant when making such calculations.

Lord Avebury: My Lords, will the Minister think again about his comment that those costs are built into the pricing of fossil fuels? Does he agree that the costs arising from global warming and the other side effects of the emissions of burning fossil fuels are not part of the price that will be paid by our descendants in one or two generations?

Lord Davies of Oldham: My Lords, it is because the Government and the whole country recognise the significance of the burden that may be placed on succeeding generations, unless we have a strategy for reducing pollutants, that the Government are so concerned to set targets for the achievement of energy production from non-polluting technologies and to improve those technologies that will clean up existing forms of production of energy.

Lord De Mauley: My Lords, given the Minister's response on clean coal technology, why is the British subsidy for investment in coal so modest both in relation to the German equivalent and in comparison with the subsidy that will be paid for renewables by 2010?

Lord Davies of Oldham: My Lords, I welcome the noble Lord to his position on the Front Bench and congratulate him on his question—and that gives me an extra 15 seconds in which to think of a suitable reply. We recognise that Germany has developed a strategy that is in advance of ours and that there has been greater investment in the past. Of course, it is the case that the German coal industry is greater than ours.
	I think that the noble Lord will recognise that we will make a Statement on Tuesday of next week which I hope, as I indicated earlier, will meet the points that have been made about the necessity of investment in this area.

Armed Forces: Voting Arrangements

Lord Garden: asked Her Majesty's Government:
	Whether they are satisfied with all aspects of the arrangements made for Armed Forces personnel and their families to be able to vote on 5 May.

Lord Drayson: My Lords, the level of publicity and information given to the service community about voting in the run-up to the May elections was far in excess of anything that we have done previously. We are satisfied that service personnel had sufficient information available to enable them to register to vote, but we are committed to working with the Electoral Commission to improve service voting processes and procedures where we can do so.

Lord Garden: My Lords, I am grateful for the Minister's Answer, although I am slightly confused: if it is all perfect then, obviously, you will not do much with the Electoral Commission. At least the Prime Minister, when speaking on the "Jeremy Vine Show" on 15 April, accepted that there was a problem and said that it would all be sorted out. Can the Minister tell us what extra measures were taken after the Prime Minister's statement to ensure that it became possible for servicemen to use postal votes?

Lord Drayson: My Lords, a number of actions were undertaken by the Ministry of Defence after the announcement of the general election. They included the issuing by the British Forces Post Office of an instruction to all forces post offices worldwide on the handling of postal votes, together with a sample of distinct envelope markings for recognition thereof.
	As regards the noble Lord's point about actions taken, it is right that every effort should be made to ensure that our Armed Forces have the opportunity to exercise their democratic right. We have had a very positive meeting between the MoD and the Electoral Commission to identify what actions can be taken learning from the experience that we have had.

Lord Astor of Hever: My Lords, will the Minister confirm that the electoral reform Bill and the Armed Forces Bill, both of which are promised later this Session, will include the necessary powers to prevent the problems that the noble Lord, Lord Garden, mentioned happening again?

Lord Drayson: My Lords, I hope that we will be able to take action ahead of that. We are looking at the possibility of whether we can make it easier for service personnel to vote by the issuing annually of a combined information leaflet and registration form. We are also looking at the possibility of carrying out a survey. That is in train at the moment. I will report to the House the progress that we make on that.

Lord Wright of Richmond: My Lords, what current arrangements are there to enable members of Her Majesty's Diplomatic Service and other public servants abroad to vote in elections?

Lord Drayson: My Lords, I do not have a briefing on that, but my understanding is that, common to other persons abroad, they have the option of registering as an overseas voter or as a personal voter. They have the means to do so either by use of a proxy or by use of a postal vote.

Viscount Slim: My Lords, what has been the reaction of commanders in Her Majesty's forces to the voting? Have there been many complaints or is there satisfaction? What has been the immediate reaction?

Lord Drayson: My Lords, my understanding is that we have not had any direct representations to the Ministry of Defence by members of our Armed Forces. However, we are aware of concerns about everything possible being done to allow our armed service personnel—given the sacrifices that they have to make in the fulfilment of their duty—to have every opportunity to vote.

Lord Roberts of Conwy: My Lords, are the Government in a position yet to say what proportion of servicemen abroad took advantage of the postal ballot and what the turnout was? If not, surely they should be able to do so in the very near future.

Lord Drayson: My Lords, following the passing of the Representation of the People Act 2000, which came into force in February 2001, our Armed Forces personnel have had a number of additional options for voting: by proxy, by postal vote or in person. The only form of voting which has continued to be measured has been that of service personnel. There is no measure whereby we can see how many people have undertaken to register to vote either by proxy or by post. However, a straw poll recently reported in Soldier magazine indicated that approximately half of those who registered to vote have sought to do so by postal vote. But I stress that those are very early data on a small sample, which I raise only to give the noble Lord some indication of the view at the moment.

Lord Faulkner of Worcester: My Lords, will my noble friend look in particular at the problems faced by young servicemen and women in getting to know about voting procedures and how to register? I had the good fortune to spend some time on HMS "Liverpool" immediately after the election, but I do not think that I came across a single young rating, male or female, who had any idea of how it is possible to get on to the electoral register. It certainly appears that something needs to be done to improve the position.

Lord Drayson: My Lords, my noble friend is absolutely right. Everything that can be done should be done to improve and encourage young people's awareness of the voting options open to them. A huge amount has been done. Some 100,000 leaflets were distributed ahead of the general election. Indeed, more was done this time than in the past. I should stress that given that the Act requires people now to register annually, we are looking at ways to improve the process by issuing a combined information leaflet and registration form. We are considering that possibility in conjunction with the Electoral Commission.

Lord Roberts of Llandudno: My Lords—

Lord Rooker: My Lords, we are in the 16th minute and it is only fair to leave enough time for the other Questions.

Nuclear Non-Proliferation Treaty Review Conference

Lord Archer of Sandwell: asked Her Majesty's Government:
	Whether they are satisfied with progress at the 2005 Nuclear Non-Proliferation Treaty Review Conference.

Lord Triesman: My Lords, the United Kingdom's objective at the NPT Review Conference was to strengthen the treaty. The UK delegation worked hard to achieve this but, regrettably, extended procedural delays meant that there was not enough time to negotiate a substantive final document. Even so, the conference aired serious concerns, and meetings on the ideas that emerged will be carried forward in the coming months. The NPT remains the cornerstone of the non-proliferation regime and the framework for nuclear disarmament. It retains the full support of the states party to it.

Lord Archer of Sandwell: My Lords, while I thank my noble friend for that glimmer of hope and fully acknowledge the hard work done by the United Kingdom delegation to ensure some progress, can my noble friend confirm that, in return for the non-proliferation undertakings in the treaty by the non-nuclear states, the nuclear states undertook to negotiate in good faith for the total elimination of nuclear weapons? Given that the nuclear powers have been so unmindful of their obligations, does my noble friend find it surprising that some non-nuclear states have failed to appreciate what a dangerous game they are playing?

Lord Triesman: My Lords, I understand that the conference was attended by almost every nation in the world, and it would therefore be unsurprising not to encounter such differences of opinion. That led to a failure to reach a final statement. But I can tell the House that the United Kingdom is most certainly fulfilling all of its obligation under the NPT, including its disarmament obligations under Article IV; I am sorry, under Article VI. Our national statement at the Review Conference made it clear that we have unambiguous support for nuclear disarmament. Indeed, we have a good record in that we have reduced the total explosive power of our nuclear forces by over 70 per cent since the end of the Cold War. That is a forward-leaning process and we are committed to continuing it.

The Lord Bishop of Oxford: My Lords, in view of the Minister's reply concerning the United Kingdom's obligations under the non-proliferation treaty, is he able to give an indication of when the decision to replace Trident, if it is to be replaced, will be made, along with an indication of the process whereby that decision will be made?

Lord Triesman: My Lords, no decision has been taken on replacing Trident, although decisions are likely to be required during this Parliament. That is as close to a timetable as I can go today. Any decision to develop a successor system would be taken in accordance with our international legal obligations and will be consistent with the NPT.

Lord Garden: My Lords, has the Minister heard the remarks of the former US Secretary of Defense, Robert McNamara, who coincidentally is to speak in the Moses Room at 7 pm tonight? He has said that the NPT conference, which he attended, accomplished nothing and that neither the American nor the British people understand the dangers that remain not only from the future proliferating states, but also from the nuclear "haves" not meeting their commitments.

Lord Triesman: My Lords, I have not heard the statements of Robert McNamara, but I shall do my best to adjust my diary for the rest of the afternoon. I believe that the conference held in 2000 considerably raised hopes. It is not the case that every conference held to review non-proliferation has raised hopes to that extent. In a sense the last conference was more like many of its predecessors than the 2000 conference. However, the work to be undertaken over the coming five years, starting with preparatory conferences in a year's time—so that four years of work lies ahead before the next main conference—will address a whole range of ideas explored in this most recent conference. We believe that some of them show considerable potential, and certainly the United Kingdom has been at the forefront of motoring some of those ideas.

Lord Howell of Guildford: My Lords, I am sure that the United Kingdom is fulfilling its obligations under the treaty and that the British delegation did its best at the recent very disappointing conference. However, is not the noble Lord, Lord Garden, right to raise somewhat the temperature of the issue? The NPT is clearly being eroded on all sides. We see that with the growth of states developing nuclear weapons and the problems surrounding them always on the edge of being developed in Iran. Is there not a case for more than reviews, but for urging the bringing forward of the new proposals the Minister has just mentioned and perhaps publishing them in a White Paper for Parliament to peruse? It could be suggested that the withdrawal time from the NPT should be lengthened so that countries cannot cheat and run, and perhaps the Russians should be involved more actively. They now say that they have changed their tone and that they want to help to curb Iran from going military nuclear. A whole range of issues here demand a degree of urgency rather greater than anything suggested in the noble Lord's replies so far.

Lord Triesman: My Lords, I have expressed both some optimism about the stance taken by the United Kingdom and some real caution about the overall lack of success in a general sense of the conference—as has the noble Lord. He has put forward a number of important ideas. I want to reflect on their possibilities and discuss them with ministerial colleagues. However, part of the framework of any discussion is that of the right of nations to use nuclear power as a source of energy and therefore have access to it as a matter of right. However, they must do so under a highly regulated system that is provided under the treaty in Article IV, and to make sure that the processes are not part of a fuel cycle that then becomes a nuclear weapons cycle. I welcome the ideas that have been suggested, but they need to be regarded in that light.

Lord Lea of Crondall: My Lords, given the commitment indicated by my noble and learned friend Lord Archer of Sandwell to multilateral disarmament, and following on the question put by the right reverend Prelate the Bishop of Oxford, is it not fair to say that our position is that we are not going to review our Trident weapons system irrespective of what anyone does? We want to have the right to do so for as long as others are developing their systems. Is that balance not consistent with the NPT?

Lord Triesman: My Lords, we will always take the steps necessary to defend this country from aggression. We will do so in a way compliant with the treaty, and I hope that I have emphasised the point. With respect, I will not be drawn further today on anything to do with the Trident decision. That decision has not been taken, but it will be taken during the course of this Parliament.

Disabled People: Independent Living

Lord Ashley of Stoke: asked Her Majesty's Government:
	Whether they are still committed to independent living for disabled people.

Lord Hunt of Kings Heath: Yes, my Lords. Independent living is one of the key areas addressed in the Prime Minister's Strategy Unit report entitled Improving the Life Chances of Disabled People. This proposes a range of new measures, including new individualised budgets, better advice and better advocacy support.

Lord Ashley of Stoke: My Lords, I welcome my noble friend back to the Front Bench and congratulate him on his promotion.

Noble Lords: Hear, hear!

Lord Ashley of Stoke: My Lords, does my noble friend agree that independent living is the next major objective for disabled people, who are so often denied the independence that other people take for granted? As to the Prime Minister's Strategy Unit, which my noble friend mentioned, does he agree that it has made many very valuable recommendations on independent living? My understanding is that the Government have endorsed those recommendations. If that is so, can my noble friend tell the House just how the Government intend to implement the proposals and how they intend to pay for them?

Lord Hunt of Kings Heath: My Lords, I thank my noble friend for his warm welcome. I think that the House will agree that my predecessor, my noble friend Lady Hollis, will be a very hard act to follow.

Noble Lords: Hear, hear!

Lord Hunt of Kings Heath: My Lords, I agree that independent living offers a profound and much better way forward for many disabled people. Essentially it means that services are built around the needs of individual disabled people rather than simply, rather paternalistically, providing services irrespective of the individual needs of those people. As for implementation, a ministerial task force has been established and an office for disability issues will be established in government in the next few months. We are determined to take forward the recommendations in the Strategy Unit report. Work on resources will continue as we take forward the recommendations in the Strategy Unit report. Evidence from the report shows that the current resources for such services can be spent much more effectively if we build services around individual needs.

Baroness Gardner of Parkes: My Lords, will the definition of "disabled" include not only those who are clearly disabled and have been over a long time, but those who become disabled because of age or illness, such as those who become incapable of putting in a nail, for example? Do the Government intend to rely on voluntary organisations to provide this help? In what way can such people be helped to continue to live independently?

Lord Hunt of Kings Heath: My Lords, on the general question of how people can be enabled to live life more independently, the development of individual budgets will give them much more power to determine themselves the services that they require. They may use those notional budgets either through direct payments or through current services. This will put them very much in the driving seat.
	As for the definition of "disability", the noble Baroness will know that this is a difficult area. "Disability" is defined in the DDA as a long-term health problem or disability that substantially limits a person's ability to carry out normal day-to-day activities. But I take her point. The principles contained in independent living very much apply to older people. The Green Paper on adult personal and social care services, on which we are consulting at the moment, again picks up those principles.

Baroness Howe of Idlicote: My Lords, does the Government's commitment extend to providing specific support, such as transport to and from school, so that grandparents, for example, may be able to take on a caring role for their grandchildren? Does the Minister not agree that many older disabled people could be empowered to play a far more active role within the family—and indeed within the whole community—if this kind of support were more regularly available?

Lord Hunt of Kings Heath: My Lords, that is a very valuable point. I certainly agree that transport is a very important component of independent living and I certainly do not disagree with the noble Baroness about the role of grandparents in providing the support she describes. The whole point of individual budgets is that they put individual disabled people in the driving seat. We want to empower people to use the resources they are given through these individual budgets to determine the best way for them to be supported into independent living.

Lord Addington: My Lords, I congratulate the Minister on his return to what is probably his rightful place on the government Front Bench. However, have the Government given any real thought to how the new reforms in incapacity benefit will be worked into the process? Surely, for many of these people, their main funding stream will affect how they achieve independent living.

Lord Hunt of Kings Heath: My Lords, although I am grateful to the noble Lord for his welcome, he will not tempt me into going into detail about the work being done on IB reform. Of course, the principles in this case operate very much in parallel to those in relation to independent living. We know that many people on incapacity benefit would much rather be in work and we know that their life outcomes would be much better if they were. At the moment, however, many of the incentives and a lack of support actively discourage those people from obtaining employment. So the reform of incapacity benefit runs very closely in parallel with the work that we wish to do in taking forward the independent living proposals.

The Countess of Mar: My Lords, is the Minister aware of the acute anxiety felt by people who suffer from ME? Further to the question from the noble Baroness, Lady Gardner of Parkes, and the Minister's answer about getting people back to work, many of these people are frightened that they will not get benefits because they will be forced into work and they will be made more ill. This is a very serious question and should be addressed. The Chief Medical Officer has said that ME was an equivalent illness to multiple sclerosis.

Lord Hunt of Kings Heath: My Lords, I am of course aware of the Chief Medical Officer's report regarding ME. I should stress to the noble Countess that this is not about forcing people into doing anything; it is about encouraging them. Many people on incapacity benefit would welcome the opportunity to go into work. We know that their health and their finances are likely to be much better if they are able to go into employment. The reform of incapacity benefit is designed to encourage and help them to do just that.

Baroness Darcy de Knayth: My Lords—

Lord Rooker: My Lords, time is up.

Borough Freedom (Family Succession) Bill [HL]

Lord Graham of Edmonton: My Lords, I beg to introduce a Bill to make new provision relating to admission to borough freedom. I beg to move that this Bill be now read a first time.
	Moved, That the Bill be now read a first time.—(Lord Graham of Edmonton.)
	On Question, Bill read a first time, and ordered to be printed.

Constitution Committee

Economic Affairs

Merits of Statutory Instruments

Science and Technology

Lord Brabazon of Tara: My Lords, with the leave of the House, I beg to move en bloc the four Motions standing in my name on the Order Paper.
	Constitution Committee
	Moved, That a Select Committee be appointed to examine the constitutional implications of all public Bills coming before the House; and to keep under review the operation of the constitution;
	That, as proposed by the Committee of Selection, the following Lords be named of the committee:
	V. Bledisloe, L. Carter, L. Elton, B. Hayman, L. Holme of Cheltenham (Chairman), L. Monro of Langholm, B. O'Cathain, L. Peston, L. Rowlands, E. Sandwich, L. Smith of Clifton, L. Windlesham;
	That the committee have power to appoint specialist advisers;
	That the committee have power to adjourn from place to place;
	That the committee have leave to report from time to time;
	That the minutes of evidence taken before the Constitution Committee in the last Parliament be referred to the committee; and
	That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed.
	Economic Affairs
	That a Select Committee be appointed to consider economic affairs;
	That, as proposed by the Committee of Selection, the following Lords be named of the committee:
	L. Goodhart, L. Kingsdown, L. Lamont of Lerwick, L. Lawson of Blaby, L. Layard, L. Macdonald of Tradeston, L. Paul, L. Powell of Bayswater, L. Sheldon, L. Sheppard of Didgemere, L. Skidelsky, L. Vallance of Tummel, L. Wakeham (Chairman);
	That the committee have power to appoint a sub-committee and to refer to such sub-committee any of the matters within the terms of reference of the committee;
	That the committee have power to appoint the chairman of such sub-committee;
	That the committee have power to co-opt any Lord for the purpose of serving on such sub-committee;
	That the committee have power to adjourn from place to place;
	That the committee have power to appoint specialist advisers;
	That the committee have leave to report from time to time;
	That the minutes of evidence taken before the Economic Affairs Committee or any sub-committee in the last Parliament be referred to the committee; and
	That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed.
	Merits of Statutory Instruments
	Moved, That a Select Committee be appointed to consider every instrument which is laid before each House of Parliament and upon which proceedings may be or might have been taken in either House of Parliament, in pursuance of an Act of Parliament, being:
	(i) a statutory instrument, or a draft of a statutory instrument;
	(ii) a scheme, or an amendment of a scheme, or a draft thereof, requiring approval by statutory instrument; or
	(iii) any other instrument (whether or not in draft), where the proceedings in pursuance of an Act of Parliament are proceedings by way of an affirmative or negative resolution;
	but excluding any Order in Council or draft Order in Council made or proposed to be made under paragraph 1 of the Schedule to the Northern Ireland Act 2000 and any remedial order or draft remedial order under Schedule 2 to the Human Rights Act 1998 and any draft order proposed to be made under Section 1 of the Regulatory Reform Act 2001, or any subordinate provisions order made or proposed to be made under that Act;
	with a view to determining whether the special attention of the House should be drawn to it on any of the following grounds:
	(a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House;
	(b) that it is inappropriate in view of the changed circumstances since the passage of the parent Act;
	(c) that it inappropriately implements EU legislation;
	(d) that it imperfectly achieves its policy objectives;
	That, as proposed by the Committee of Selection, the following Lords be named of the committee:
	L. Addington, L. Armstrong of Ilminster, L. Boston of Faversham, V. Colville of Culross, V. Eccles, L. Filkin (Chairman), L. Jopling, L. Methuen, B. Morgan of Drefelin, E. Northesk, L. Tunnicliffe;
	That the committee have power to appoint specialist advisers;
	That the committee have power to adjourn from place to place within the United Kingdom;
	That the committee have leave to report from time to time;
	That the minutes of evidence taken before the Merits of Statutory Instruments Committee in the last Parliament be referred to the committee; and
	That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed.
	Science and Technology
	Moved, That a Select Committee be appointed to consider science and technology and that, as proposed by the Committee of Selection, the following Lords be named of the committee:
	L. Broers (Chairman), B. Finlay of Llandaff, L. Howie of Troon, L. Mitchell, L. Patel, L. Paul, B. Perry of Southwark, B. Platt of Writtle, E. Selborne, B. Sharp of Guildford, L. Sutherland of Houndwood, L. Taverne, L. Winston, L. Young of Graffham;
	That the committee have power to appoint sub-committees and that the committee have power to appoint the chairmen of sub-committees;
	That the committee have power to co-opt any Lord for the purposes of serving on the committee or any sub-committee;
	That the committee have leave to report from time to time;
	That the committee and any sub-committee have power to adjourn from place to place;
	That the committee and any sub-committee have power to appoint specialist advisers;
	That the minutes of evidence taken before the Science and Technology Committee or any sub-committee in the last Parliament be referred to the committee; and
	That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed.—(The Chairman of Committees.)

On Question, Motions agreed to.

Business

Lord Grocott: My Lords, as the House will know, my right honourable friend the Foreign Secretary is making a Statement today on the EU Constitutional Treaty. With the leave of the House, it will be repeated here. We shall take the Statement during the first of today's debates after the contribution of my noble friend Lord Barnett—that is, after the fourth speaker. The Statement will be repeated by my noble friend Lord Triesman.

EU: Future Financing (EUC Report)

Lord Radice: rose to move, That this House takes note of the report of the European Union Committee on Future Financing of the European Union (6th Report, Session 2004–05, HL Paper 62).

Lord Radice: My Lords, my sub-committee is extremely grateful that we are able to debate our report on the future financing of the European Union at such a crucial moment in European affairs.
	I begin by thanking all my sub-committee colleagues for their hard work and the members and chairman of the European Union Committee for their support. I should also like to thank our Clerk, Judith Brooke, our European Committee specialist, Oriel Petry, and our specialist adviser, John Peet, for their help in drawing up the report.
	My task this afternoon, as chairman of the sub-committee, is to spend most of my speech outlining the main conclusions of our report. But after the result of the French and Dutch referendums, it would be quite wrong if I did not refer to the new situation in which decisions about the seven-year financial package, from 2007 to 2013, will be taken, although obviously my remarks are my own rather than those of the committee.
	I remain a supporter of the European constitutional treaty on the grounds of greater efficiency, accountability and openness. However, my view is that following the French and Dutch "No" votes, the constitutional treaty is dead, at least in its present form. No doubt people in France and the Netherlands voted "No" for different reasons, some of which have little directly to do with the treaty. But the fact is, the majority voted "No" in both countries by substantial margins and a second vote on the existing treaty in either country is surely inconceivable. In these circumstances, the treaty in its present form should be withdrawn or at least put in cold storage.
	A big responsibility now rests with the United Kingdom, which takes over the presidency of the European Union on 1 July. I hope that, without displaying a trace of schadenfreude, the Government will help other member states to face up to the reality of what has happened, draw lessons from the French and Dutch rejection and, if possible, address the voters' discontent.
	One of the key issues for the UK presidency is likely to be the seven-year financial package. We start from the position that the budget is, and should remain, a small percentage of European Union gross national income. As our report shows, it has actually fallen from 1.05 per cent in 1992 to 0.98 per cent in 2003. The overwhelming amount of public spending is, of course, at national level. Some 2 to 2.5 per cent is spent at European level compared with the national EU average of 48.5 per cent. That gives the relativities very well.
	Much of EU policy is, in any case, better carried out at national level. For example, as we say in our report, achieving the so-called Lisbon goals of faster growth, more and better jobs and greater social cohesion must rely for the most part on economic and social reforms which are the responsibility of individual member states. But there are some areas in which resources can be usefully spent at European level, provided that these genuinely add value. For example, our report argues for European programmes in research and development, education and infrastructure to back up the so-called Lisbon agenda. As we also note in our report, the Sapir committee, set up by the former president of the Commission to look at the budget, proposed a European restructuring fund for workers thrown out of employment as a result of sudden economic change.
	However—and this is our first very substantial point—we are very critical of the way in which the budget is presently constructed. Too much of it is a historic relic which fails to focus on the European Union's current priorities and needs. We are especially critical of the continued predominance of the common agricultural policy in the budget. In this context, we consider the Franco-German deal subsequently endorsed by the European Council in 2002 to fix the level of agricultural support payments until 2013 to be highly regrettable. As we say, it is essential that these figures should be treated as ceilings for expenditure, not as targets.
	We strongly back recent reforms to the CAP and believe that the new system of direct income support strengthens the argument for shifting at least some of the burden of financing the CAP back towards the member states. We note with interest that the Sapir report argued for cutting agricultural support from around 40 per cent of the EU budget to 15 per cent of the total budget. Speaking for myself, that is the right kind of proportion.
	We are also critical of the Commission's conservative approach to EU structural and regional funding. We think it is quite wrong that 50 per cent of the structural funds should go to the richer member states. Here we agree with the UK Government that in addition to the two applicant countries, Romania and Bulgaria, structural funds should be concentrated on the 10 new member states which are overwhelmingly poorer than the existing states.
	Structural funds have proved in the past to be a good mechanism for bringing up the living standards and the growth potential of the poorer countries towards the average. We need to ensure that that is the way in which they are used in future. Indeed, using the same logic, which argues for shifting much of the burden of financing the CAP towards member states, we believe that the national governments of the wealthier states should be prepared to fund their own regional policies. If they think it is necessary, they should do it themselves—they do not need EU funds to do it for them.
	Making a general point, we say that, looking to the future, it is essential that a better job is made of devising the budget. We propose that a high-level independent panel is charged by the Council with reviewing the budget, especially the monitoring of the added value of spending proposals.
	I now turn to the vexed question—the famous question—of the UK rebate, or what the noble Baroness, Lady Thatcher, used to call "my money". As we have heard from our French and German colleagues, the rebate issue will feature prominently in the discussions and negotiations on the budget. The history of the rebate is clearly set out in Chapter 8 of our report. There are also some very useful tables showing the impact of the abatement on the UK net contribution to the budget. These demonstrate that without the rebate we would be the biggest net contributor.
	It is also clear that almost all Britain's excessive budget contribution is attributable to our low share of receipts, especially of agricultural spending—which, incidentally, one of our witnesses called the French rebate. If the CAP were to be reformed or its financing shifted from the European to the national level, then both the unadjusted British net budget contribution and the rebate would fall very sharply.
	We conclude that the British insistence that the rebate is non-negotiable is legitimate in the context of an unreformed CAP. However, if real reform were on the table—if more reform were on the table—then the Government should be prepared to negotiate. I do not think that the Government accept that point and I quite understand, for bargaining reasons, why not. They do not want to reveal their hand too soon. But if the other countries, particularly France, are not prepared to look further at reform of the CAP, then we are entitled to hold on to our rebate.
	In conclusion, despite the severe kick in the pants administered by the French and Dutch voters, I remain convinced that the EU is a good bargain for its members, including the United Kingdom. I believe that the single market drives prosperity across the European Union. Its existence underwrites stability and democracy in Europe, and its effectiveness gives the European countries greater clout in the world.
	I also very much agree with the leader in last Sunday's Financial Times, which stated:
	"The No votes in France and the Netherlands were partially the result of political misinformation and ritual abuse of European institutions by governments".
	The cause of many of the EU's present difficulties is persistent dishonesty and misinformation about Europe. I hope that the careful work of Select Committees, both in this House and in the Commons, can contribute, at least in a small way, to a more honest, better informed, less biased debate about European matters. I beg to move.
	Moved, That this House takes note of the report of the European Union Committee on Future Financing of the European Union (6th Report, Session 2004–05, HL Paper 62).—(Lord Radice.)

Lord Campbell of Alloway: My Lords, it is a rare privilege to follow the noble Lord, Lord Radice, particularly as I really do not have the expertise to do so. But I wish to compliment the noble Lord and all the members of his committee on the report, which should command the gratitude not only of your Lordships but also of heads of state and their advisers, who are due to attend the June summit.
	This comes in the wake of the visit to Berlin by the Franco-German axis. I declare my interest as a committed Europhile and a committed Francophile. This report has an extraordinary merit because, as I see it, it identifies the means and the manner in which the extended EU may survive and prosper. It will do so not by adopting default mechanisms, which were referred to in that most interesting article of the noble Lord, Lord Rees-Mogg, in the Times today. It will be achieved only by accepting the proposed system of economic co-operation based on a single market, which all the peoples of Europe will accept, but will not accept much more.
	That involves retaining, in substance for a while, the extant legal and constitutional structure, pending an agreed revised framework that is acceptable to all members of the enlarged European Union. One hopes that a phoenix will arise from these ashes, but it will take some time.
	I agree with the noble Lord, Lord Radice, that the treaty should be put in storage. I agree that we have to face up to realities, and I agree that part of the problem is the budget. To what end are we to set up seven or more referendums? Surely it is not with the past that we are concerned, but with the future.
	The report on the financing of the EU, in the wake of the reports on the future status of the EU charter and the future role of the European Court of Justice, hoisted the danger cones on ratification of the EU constitutional treaty. The Government ignored the warning. Ratification was take-it-or-leave-it. Amendment was not on offer, and your Lordships' House was deprived of a vote on the Bill.
	I cannot speak save subject to what may be being said in another place at the moment, but, as at present advised, the Government appear to remain committed to a referendum before ratification, if not to be suspended, in breach of the legal obligation of unanimity.
	France, Germany and Italy in particular are in recession, having suffered from an overvalued euro. That could have been alleviated by timely selling by the ECB of euros for dollars and yen. The euro is now at an eight-month low. The stability pact has been breached, and wittingly breached, contrary to the borrowing limits, which were supposed to be legally enforceable. The question of reverting to the franc, the lira and the mark has already arisen. Restoration of the EU and its economy is wholly dependent on the introduction of a disciplined, agreed financial policy. That is why this report is of such immense value.
	Mismanagement of fiscal and monetary demand; failure to adopt an appropriate financial perspective; the ineptitude of the ECB; and a surfeit of bureaucratic power for the Commission stifled stable growth, slighted the economy and fostered unemployment. There were no doubt other reasons for the "No" vote of France, which came as no surprise. The treaty, fatally wounded, was slain by the reasoned, measured "No" vote of the Dutch on grounds such as loss of identity, euro inflation, the conduct of the Commission, immigration and the accession of Turkey, which is supported by the United Kingdom. The vote came as no surprise.
	Since June 2003 the ECB has made no financial move, during a period in which the Bank of England moved interest rates in either direction six times and the Federal Reserve moved them nine times to sustain economic viability and growth. At the June summit, the heads of state must reject the Berlin proposal of the Franco-German axis, and they must accept that neither they nor the politicians are able to be at the heart of Europe, which belongs to the peoples of Europe whom they represent.
	Some urgent questions of common concern, relating to this marvellous report, have arisen for attention, quite apart from the questions of our budget rebate, which could suffer long-term adjustment in negotiation, and the protection levies of the EU. Most though not all these matters are dealt with in the report, and they include an appropriate financial perspective, which excludes pre-emption by the Council of disproportionate allocation of resources, and review by an independent panel; the purpose and structure of the budget, subject to scrutiny by an outside body; curbs on the powers of the Commission and control of certain functions, identified in this report; removal of the mandate of the independence of the ECB, and perhaps removal of the board of management; and a reduction in the interest rate, at once, to 1.5 per cent, as advised some time ago by the OECD. There should also be an appropriate voting procedure, which could enable the enlarged EU by agreement to gather momentum. All those relationships and matters should be dealt with in concert with the European Parliament, so that an acceptable general resolution may be had.
	In conclusion, is it not apparent that since Messina the political concept of an integrated, indissoluble superstate favoured by the Franco-German axis, somewhat akin if not identical to that proposed by the EU constitutional treaty, has ever haunted the scene? What happened was a compromise to secure the ratification of the Rome treaty and subsequent treaties, such as Maastricht. All member states, so that they would be induced to sign those treaties, accepted that the concept of the superstate—which many of them retained in their mind—should be excluded from the drafts of any treaties. That concept has been rejected by the people of France and the Netherlands. It could no longer be acceptable to the peoples of Europe, if indeed it ever was—and they were never consulted until the French and Dutch referendums.

Lord Kerr of Kinlochard: My Lords, it is with some trepidation that one makes one's first intervention in your Lordships' House. In my case, a particular degree of trepidation may be appropriate, given what we may be about to hear in the Statement—the fate of a piece of homework on which I spent some time working for three distinguished Members of this House and 200 other elected politicians, in the EU convention that produced the first draft of the constitutional treaty. That is not the subject of our debate today, but, like the noble Lord, Lord Radice, I may be drawn into referring to it. I shall of course say nothing remotely controversial.
	The motto of the clan Kerr is sero sed serio, which, if any of your Lordships' Latin were rusty, I should have had to translate as "Late, but in earnest". It is said that the motto was acquired from the clan's habit of being rather late for the battle, but in earnest about the division of the spoils. That is appropriate to my role on the committee chaired by the noble Lord, Lord Radice, as I joined it when it had already done all the serious work and taken all the serious evidence, including from one very distinguished Member of this House, and was reaching its conclusions. I therefore can say that I agree with its conclusions, and believe it to be an admirable report. I agree with what has just been said about it.
	I shall add only three points: on perspective, on balance, and on equity. On perspective, I started work on European Union financial matters about 20 years ago. At the time, the large majority of member states believed, among other things, that the European Union should grow via a growing budget. Only a very small number of member states took a different view. It may not be wholly coincidental that only a very small number of member states were net contributors to the budget; indeed, 20 or even 15 years ago, there were only two net contributors—the United Kingdom and the Germans. Today there are eight or nine net contributors and, as the report which was so well presented by the noble Lord, Lord Radice, brings out, the debate is now about whether the resources of the European Union should be just over or just under 1 per cent of the gross national income of the European Union. The Commission's opening bid was 1.14 per cent; the large net contributors prefer not to go above 1.00 per cent.
	There is plenty of room for real and sharp debate, but the perspective is that we are no longer talking about building a supranational entity via a budget. We are, incidentally, no longer talking about creating a taxing power for the European Union. Twenty years ago, a majority of member states believed that the European Union should be given the right to levy taxes. It is the case now that no member state wishes to concede it that right, although the Commission still asks for it.
	The idea of a superstate, which lay behind some fears about the constitutional treaty, needs to be seen against the perspective of an entity which is allowed, by levies from the member states, a maximum of about 1 per cent of GNP to work with, and is allowed no taxing power. Those arrangements have to be changed only by unanimity. All those three elements would have remained the case had the constitutional treaty been ratified.
	My second point is about balance. The noble Lord, Lord Radice, has drawn attention to the absurdity, as it seemed to him and his committee, that about 50 per cent of the budget of the European Union should be spent on the common agricultural policy, when agriculture represents only about 4 per cent of gross national income in Europe. It may be no coincidence that about 50 per cent of the budget of the European Union is not subject to the full rigour of scrutiny in the European Parliament. That 50 per cent—dépenses obligatoires—includes the agriculture budget. I am not saying anything remotely controversial, but one passing advantage of the constitutional treaty would have been to extend the Parliament's full scrutiny across the full range of the budget. I refer of course to the distribution of the budget, not to the size of the budget—the size would have remained a matter for the member states, but the distribution would have been subjected to the full scrutiny of the European Parliament.
	I believe that over time the interests of the urban majority would have played on that extraordinary imbalance, with 50 per cent for agriculture. However, that is not to be. It may be that the point that I have just made was a component in the French "No" vote. It is certainly the case that France is by far the biggest single recipient of funds from the common agricultural policy, with almost twice as much as comes to the United Kingdom.
	I believe that aménagement de territoire—looking after and caring for the countryside—is an entirely laudable aim. The beauty of the French countryside is a wonderful thing, but it should be paid for by the French taxpayer, not by the British taxpayer, let alone the east European taxpayer. That does not make sense and over time it will have to change.
	Here I come to my point about equity. Will it change now? Will France concede changes to the common agricultural policy which could be called real reform? I think that the chances verge on zero. They probably were zero before the referendum; they certainly are zero after the referendum. The committee chaired by the noble Lord, Lord Radice, concluded that so long as the CAP's predominant weight in the budget remains, the UK abatement is justified. That seems to me to be plainly and clearly the case. Even after abatement we remain the second largest contributor to the Union budget.
	Of course, there will be bluster about how we need to change our position—there always is. Of course, we shall be isolated on this issue. It stands to reason that we are isolated. We were isolated in 1984 when we secured the abatement. We were isolated in 1988, and in 1992, and in 1999 when we secured its renewal. We shall be isolated again, and it will be renewed again.
	I wish to say two more words about the constitutional treaty. A no is a no. An American might add that two noes are a real "no no". I do not for a moment dispute that there is no point whatever in proceeding with a ratification process in this country. Indeed, I cannot understand the motive underlying pressure from Paris, Brussels and Luxembourg for a macabre ritual dance of ratification and referenda to proceed. I see no point in it. If the French were to make a case, they would have to explain whether—this seems to me to be implausible—it was the intention of the Elysée that the question should be put again to the French voter on the basis of the same treaty. That is conceivable, but it seems to me to be wildly implausible. Or—this is the only other possible explanation—the French plan is to propose changes to the treaty, or some additional measures, which will in some way qualify or adjust the treaty. In which case it is absurd to ask the Polish, British, Danish or Irish voter to answer a question that has become entirely hypothetical, because the package on offer would in that situation not be the one which is on offer today. It follows that there is no point in continuing the dance.
	On the other hand it seems to me that there is a lot of point in trying to learn a lesson or two from what has occurred. One obvious lesson from the French and the Dutch campaigns and their result, and from the campaign in this country to the extent that we have had one, is that the EU, which was created for motives of reconciliation and reassurance—very worthy motives—has paradoxically come to seem threatening. Its institutions have come to seem extremely remote and obscure. A further paradox is that the treaty, which was rejected partly for those reasons, would have done something to remedy those defects. Therefore, the question is, could any of the reforms which happen to be in the treaty be implemented without the treaty?
	Some plainly cannot be. For me, the most important reform for the long-term health of the EU is that it should have a voting system which is democratic in the sense that there is a clear correlation between population of country and voting weight in Council. That is not the case with the present situation—the situation to which we are driven back, and have to operate with the present tangle of treaties, including the Nice Treaty with its absurd and incomprehensible voting system, which has such a low correlation between population and votes.
	It is, of course, the case that had the constitutional treaty been ratified, British voting weight in the Council would have increased from about 9 per cent to about 13 per cent. However, the reform was an acceptable outcome because everyone could see that it was more democratic to have some closer correlation. One day we shall have to have it, but to introduce it now would mean amending the treaties. Clearly, we are not amending the treaties so we cannot have it now.
	However, there are one or two things that we could conceivably have now. I shall give just two examples. If the constitutional treaty had been ratified, the Council would have been required to legislate in public. There is no treaty so there is no such requirement. However, the existing treaties do not require secrecy. To some, like me, it seems in principle odd to legislate in secrecy. The act of legislation should in my view be done in front of the citizen. The Council could decide of its own volition and its own accord to open its doors, to let the cameras in and to legislate in public. I hope that it will do so.
	I give a second example. If the constitutional treaty had been ratified and had come into force, the Commission would have been required to give national parliaments a first look at draft legislation and the Council would have been required not to look at it until national parliaments had had a chance to do so. With no treaty there is no such requirement. But why not? The Commission could decide of its own volition to operate the procedure that was laid down in the treaty. The Council could decide of its own volition to give the Commission the time to do so. I hope that it will.
	Some may say that this is wicked "cherry picking" of the treaty, underhand and unacceptable. However, would they really argue that it is best that the European Union go on seeming remote and obscure, and that attempts to make it more transparent and to build a closer link to national parliaments are bad just because they happen to have been encapsulated in the draft treaty which clearly we are not going to ratify? Perhaps they would, but in that case let them say so openly, because their motive could only be that they wished the European Union to remain unpopular. I repeat that I am determined to say nothing remotely controversial.
	The quality of the report on EU future financing, which the committee chaired by the noble Lord, Lord Radice, produced, and the quality of the speakers who will follow me, show how serious and substantive a contribution this House could make to EU legislation were it to be given a greater opportunity to do so. I thank your Lordships for your patience regarding my contribution; and I warmly commend the report to the House.

Lord Barnett: My Lords, I consider it a privilege to pay tribute to such an excellent maiden speech. I would have liked that maiden speech even if I had not agreed with almost everything in it, which I did. Not all maiden speakers manage to relate their maiden speeches to the relevant debate—this debate concerns the European Union budget—but in this case the noble Lord certainly did so. That is no surprise, of course.
	In a moment I shall refer to some of the points that the noble Lord made on the constitution, with which I gather he had a little to do. As we all know, the noble Lord was a very distinguished diplomat. He was head of the Foreign and Commonwealth Office. Indeed, he also served in the Treasury as Principal Private Secretary to one or two Chancellors, two of whom are present. Even if he had not had that unfortunate job to do, his service in the Treasury indicates what a brilliant mind he has. That service occurred after I left the Treasury.
	The noble Lord, Lord Kerr, has had a tremendous career in the Diplomatic Service. That career is very well known. I hope that his career in the Lords will prove to be an excellent one, as, indeed, is indicated by his maiden speech. It will be a great pleasure for all of us to hear him speak on many occasions. I hope that noble Lords will recognise that what the noble Lord has said today is an excellent foretaste of the speeches we can expect to hear from him. He adds a great deal to this House and to the contribution that we will be able to make as the House of Lords in the future. I am delighted to offer my personal congratulations again on such an excellent maiden speech.
	I thank my noble friend Lord Radice and his committee for this excellent report. It sets out the facts clearly, and anyone who reads it will find it as excellent a report as I did. The trouble is that the report is obsolete already. I regret to say it, but the French and Dutch referendums have changed the landscape both in relation to the European Union constitution proposal and to the budget that we are debating today. Obviously, the budget is at the very heart of the European Union and the way in which it should be run. Those referendums, however we interpret them, show very clearly that the people of Holland and France do not like the way in which the European Union is run. It would be foolish of us not to recognise that straight fact. Whatever my right honourable friend the Foreign Secretary is saying at present, and whatever my noble friend Lord Radice said about the treaty being put in cold storage—as has been said by the noble Lord, Lord Kerr, and others—it is more than just cold storage. To talk about resuscitating it and saying we should all have referendums is absurd and a nonsense. The sooner we recognise that, the better.
	However one analyses the reasons for the "No" votes—and many analyses have already been given in various newspapers and commentaries—the fact is that the treaty was most certainly never read by the great mass of the Dutch and French populations, as it has not been read here in the UK and would not be whether we had a referendum or not—510 pages is quite a lot for the average person to read. I doubt very much that they would do so.
	Equally, I regret that my noble friend Lord Radice in his excellent opening remarks suggested that our Select Committee reports in your Lordships' House—and this is a good example of the excellent kind of reports that the House of Lords produces—will not be read by many in the United Kingdom, let alone France, Holland or Germany for that matter. It is a shame, because they should read it; there are a lot of excellent facts in the report.
	If we had a referendum on the European Union budget in almost any country there would almost certainly be a "No" vote. As I said, it is right at the heart of the way that the European Union is run. The electorate will not have read the fact in this well documented report—my noble friend Lord Radice has already referred to it—that over recent years the budget has declined as a percentage of GNI. That will not stop everyone assuming, and newspapers commenting, that it has gone up regularly every year. As this report brings out, the plain fact is that European Union member states have increased their budgets far more than the European Union budget itself. We see in paragraph 12, page 13, that national budgets,
	"on average across Europe have increased by 22.9 per cent; and over the same period the United Kingdom budget has increased by 67.5 per cent".
	The budget of the European Union actually fell. I doubt if that would be heard by many people in the country or be expressed in any newspapers, whether in leaders or comments, but it is a fact.
	So what does a believer in democracy who also, like me, has been very much pro-European Union, do in these circumstances? First, as a parliamentary representative, whether elected or not, we must represent the facts as we see them. As we have seen from the two referendums and almost certainly would see from a referendum in the UK and in many other countries across Europe, people do not like what has been going on. So what do we do about the budget now? I start with paragraph 137 on page 47. It is a statement of the obvious:
	"We do not believe that these negotiations should be rushed".
	They certainly should not be rushed, and I am sure that they will not be rushed. The chance of agreement on anything at the present time—whether the budget or anything else—is pretty slim.
	That being said, the negotiators on the budget, let alone the public, will not care a jot about the facts of this report or of the excellent Sapir report, to which my noble friend Lord Radice referred both today and in the report. As has been made clear, France and many others will insist on the abolition of the UK rebate right at the start of any discussions. They will go on about it not only then but throughout any discussions. The only compromise for the UK would be—as the report brings out and as my noble friend said—if the common agricultural policy were not just reformed, as recently, but scrapped. If it were scrapped, that would do two things. First, it would substantially reduce the size of the budget. Secondly, it would make it much fairer to the UK; not only to the UK but to many others in the European Union. President Chirac, and Schroeder, and anyone else who presses the UK's Chancellor and Prime Minister to abolish the rebate should be told in clear terms, "Yes, we will agree to consider the rebate, provided you consider the abolition of the common agricultural policy".
	I noted what was said by Martin Wolf, a highly respected journalist on the Financial Times, who was a witness. He said that if you get rid of agricultural spending, there is no case for a rebate. I am sure that most sensible people—I am excluding no one at the moment—even possibly a few round the Finance Committee table that I have attended over the years would recognise the reality of that. The fact is that it would delay any potential deal. That is the only compromise that the UK should accept; no other compromise is possible.
	As the Committee brings out in this report, the present budget has its priorities all wrong. The lack of economic growth throughout the European Union was obviously a factor in those "No" votes. High unemployment, low economic growth, and dislike of the leadership in both countries were factors, but the lack of economic growth was at the heart of it. We should perhaps send copies of the report to the next Finance Committee meeting in Brussels; it might be helpful to them to have it in front of them. Paragraph 13 clearly brings out that if they change their priorities there will be a better chance of economic growth in the European Union, where growth has sadly not been too good in recent years.
	However, recognising that the referendum is a start, we will have to accept that the European Union—if we are listening to those views in Europe—will have to be on a smaller scale, at least to begin with. I hope that we will still achieve integration and I hope that some of the aims stated in the excellent maiden speech by the noble Lord, Lord Kerr, will be achieved. Certainly, it would be helpful if there were more openness in the meetings that reach the decisions that are crucial to all of us.
	Initially, we shall have to do less. I regret that, but those are the facts as we see them. The public may eventually regret that we are unable to make further progress.

EU Constitutional Treaty

Lord Triesman: My Lords, with the leave of the House, I shall now repeat a Statement made by the Foreign Secretary in another place. The Statement is as follows:
	"With permission, Mr Speaker, I should like to make a Statement on the EU constitutional treaty, following the "No" votes in the referenda in France and the Netherlands last week. I shall be explaining why we have decided to postpone the Second Reading of the European Union Bill.
	"At the end of 2001, European leaders met at Laeken in Belgium to consider the future of the EU. Just three months before, the world's sense of order had been shattered by the atrocity of 11 September.
	"Reviewing the progress made within the EU over previous decades, European leaders said that the Union,
	"stands at a crossroads, facing twin challenges, one within and the other beyond its borders . . . Within the Union, European institutions must be brought closer to its citizens; beyond its borders, the Union is confronted with a fast changing, globalised world".
	"It was this Laeken declaration which led to the Convention on the Future of Europe and to the intergovernmental conference which followed it. Negotiations in the IGC were hard fought, but the United Kingdom achieved all its key objectives. My right honourable friend the Prime Minister and I therefore had no hesitation in recommending the new treaty to Parliament and to the country. We did so, not least, because the EU's organisation plainly needed reform better to cope with the new challenges set out at Laeken and with the enlargement to 25 member states.
	"So, the treaty includes: a reduction in the size of the European Commission; a much better voting system which benefits the United Kingdom; an end to the six-month rotating presidency, with replacement by a full-time president of the Council and team presidencies; better arrangements for involving national Parliaments in EU legislation; and greater flexibility through "enhanced co-operation", to allow groups of member states to co-operate more intensively while others go at their own pace. And we kept our national veto in all key areas of concern.
	"The Prime Minister and I signed the constitutional treaty in Rome on 29 October last. But like any other EU treaty it requires ratification by every one of the EU's member states—now 25—before it can come into force. As of a week ago, nine countries had approved the treaty through their parliamentary processes and one, Spain, by referendum. In the last week, however, as the House and the country are very well aware, in referenda the electors in France voted "No" by 55 per cent to 45 per cent and in the Netherlands by 62 per cent to 38 per cent.
	"The constitutional treaty is the property of the European Union as a whole. It is now for European leaders to reach conclusions on how to deal with the situation.
	"To give effect to the UK's commitment to ratify the treaty by referendum, we introduced the European Union Bill in the last Parliament and it was given a Second Reading by this House by a majority of 215 on 9 February. The Bill fell on the calling of the general election. It was reintroduced in this new Parliament on 24 May—before either the French or Dutch referenda—and it would, in normal circumstances, have been scheduled for its Second Reading very shortly.
	"However, until the consequences of France and the Netherlands being unable to ratify the treaty are clarified, it would not, in our judgment, now be sensible to set a date for Second Reading. There is also the need for further discussions with EU partners and further decisions from EU governments. The first opportunity for collective discussion within the EU will take place at the end of next week when the heads of state and government meet in the European Council.
	"We shall of course keep the situation under review and ensure that the House is kept fully informed. I should emphasise that it is not for the UK alone to decide the future of the treaty and it remains our view that it represents a sensible new set of rules for the enlarged European Union. We reserve completely the right to bring back the Bill providing for a UK referendum should circumstances change. But we see no point in proceeding at this moment.
	"As I commented during last week, these referendum results raise profound questions about the future direction of Europe. The EU has to come to terms with the forces of globalisation in a way which maximises prosperity, employment and social welfare. There are other larger questions: how we can strengthen the force for good of the EU in foreign policy, along with aid to poorer countries and trade. How can we ensure value for money for our citizens and better regulation? How can we make a reality of the widely agreed concept of subsidiarity, ensuring that decisions are made at the lowest level possible?
	"All these issues have long been central to the United Kingdom's priorities for the European Union and will be so for our EU presidency which begins on 1 July. The continuing issues of enlargement and future financing will also be on our agenda. At the start of the presidency, I will publish the latest in our series of White Papers on the EU and make an accompanying Statement to set out our priorities in more detail.
	"Let me conclude by saying this. The European Union remains a unique and valuable achievement, central to the United Kingdom's prosperity and well-being. The world's largest single market has enabled the businesses and people of this country to earn new prosperity by trading freely across borders. European co-operation has broken down barriers to travel, work and leisure. And the EU remains a vital engine of peace, democracy and reform.
	"The EU does now face a period of difficulty. In working in our interests and the Union's interests, we must not act in a way which undermines the EU's strengths and the achievements of five decades".
	My Lords, that concludes the Statement.

Lord Howell of Guildford: My Lords, we are all grateful to the noble Lord, Lord Triesman, for repeating the Statement. I confess that I am a little surprised that in the other place the Prime Minister did not himself make the Statement, because, as the noble Lord, Lord Triesman, has reminded us, it is at the heart of government strategy and raises questions of the utmost profundity.
	However, even if the Prime Minister had made the Statement, I would still be answering, because my noble friend Lord Strathclyde is in Huntingdon for the sad occasion of the funeral of my noble friend Lady Blatch. I know that all your Lordships will share our sorrow at the passing of this remarkable and redoubtable Member of our House. Her robustness and deep conviction were a lesson to us all—and she was a very, very close friend.
	Regarding the Statement, last week was momentous in the history and development of modern Europe. My hope is that the Government have learnt the right lessons, or are, at least learning, from the events across the Channel. From the tone of the Statement, it does not sound like they have learnt those lessons one little bit.
	The Government have left us and themselves in the worst of all worlds. They refuse to acknowledge the obvious, that the constitution, as drafted, is now a corpse. I can understand their grief and indecision, since the constitution, which the Government have already signed—as the Statement reminded us—was very much their creature. It certainly was not ours. Those of us who urged opposition and warned that the treaty would damage Europe and the Union were repeatedly dismissed as xenophobes, anti-Europeans and isolationists—and there were other abusive statements. We were shrilly asked who our allies in Europe were, with the implication that we had none. Now we have the answer. It turns out that the people of Europe, or a large chunk of them, are the good Europeans and it is the governments, or some of them, who have been going in the wrong direction.
	Voters in France and Holland may have had widely varied reasons for voting the constitution down, but there was a common theme and it was clear, as it is here. People fear excessive centralisation of remote power. They do not reject Europe or the European Union, but they want more say in keeping their own models, arrangements and systems under their own laws. Some people may be to the left on the economic spectrum, some to the free market right and some may have completely different purposes and concerns.
	The constitution, imposed as it was by a convention from on high, with all the overblown references to the USA, the Philadelphia convention and so on, went, and obviously goes, too far in favour of centralisation and central institutions. It upsets the balance with which the European Union has made great progress in the decades since it was founded. In a sense, it is like the game "grandmother's footsteps" where, after all the success, the fatal step goes too far and wrecks everything.
	On these Benches, we see this as an opportunity. We greatly favour enlargement, and we favour sensible rules for organising a growing Europe. By the way, we want an assurance that the accession arrangements for Bulgaria and Romania remain a priority, even after the débâcle of last week, with other countries, including Turkey, to follow. We support all of that and want to see it.
	But what is the Government's position and response? The question remains open, even after this Statement. It appears to be to stab at the pause button, as recommended by Mr Mandelson, the commissioner from Brussels. But to put everything on hold is the worst option of all. To say that we should muddle on as before is the second worst option. Much the best option would be to seize the moment and bring forward clear proposals for a more flexible, modest, network Europe with powers returned to nation states and absurd ambitions for world stage foreign policy dominance curbed.
	The current Bill before Parliament, which provides for a referendum on the constitution, should not just be shelved, as I understand is proposed, but should be taken away altogether. Of course, if there is any attempt to introduce a revised constitution by the back door, we would naturally insist on a referendum on that and on any moves that change the powers of this Parliament under our constitution.
	Later, in the resumed debate, I shall be commenting on the excellent report on EU finance by the committee chaired by the noble Lord, Lord Radice, and on the economic aspects of this farrago. Of course, I shall also be making a comment on the most interesting and expert maiden speech of the noble Lord, Lord Kerr. I shall be saying something on the rebate and the net contribution to the budget. Suffice it to say that the euro, which we were lambasted in intemperate terms for not wanting to join, and which was always a political construct, now looks distinctly shaky after the events of last week. Withdrawal is a headline issue in the newspapers in Italy, where I was yesterday, and has even been muttered about in Germany.
	None of this is doing Europe, or Britain, any good at all. It is no use blaming the people for not understanding or governments for not explaining the alleged wonders of the constitution adequately. We must ask what the British Government are so tremulously waiting for. They ought to be grateful that they have momentarily escaped the referendum axe. Are they now waiting for a lead from Luxembourg or the Scandinavian countries? What is the change of circumstances mentioned in the Statement in which the Bill would apparently be brought back? We are left wondering.
	This should be a time not for dithering but for creative ideas and leadership from London to help Europe prosper once more, which it is not doing at the moment, and to help Britain benefit as part of a reformed Union, as our presidency of the EU comes along in the next few weeks. Yet the Statement shows no clarity, no contrition for past crass errors and no awareness of the heavy duty on the shoulders of the British to refresh, revitalise and democratise this Europe of ours, which we have saved in the past more than once, and which we should now save again by our exertions and example.

Lord Wallace of Saltaire: My Lords, I must also say how much we will miss Emily Blatch. I had many enjoyable conversations with her about higher education, which was one of her great concerns. I can also remember many long, late evenings in Committees on Bills as she fought amendment after amendment from the Conservative Front Bench.
	Unlike the Conservatives, we very much welcome the constructive and multilateral approach that the Government have taken in this Statement and the surprising and welcome emphasis on co-operation and consultation with our European partners, which is appropriate in the circumstances. The results in these two referendums, in particular in the Netherlands, were a massive rejection of the current proposals. As it happens, I was in The Hague on Wednesday afternoon and evening and, from the comments of my Dutch hosts, was well aware of how unexpected and decisive a rejection it was.
	We are more aware than we were of the extent to which Brussels institutions appear remote, not just to our own population but to the populations of all other member states, and of the failure of political elites throughout the European Union, certainly throughout the original west European member states, to explain and justify the development of common policies and institutions. We on these Benches believe that it has been a particular failure of the leadership in all four major states: in France most of all, but also in Germany, Italy and the United Kingdom.
	We believe that one of the greatest failures of the government over the past eight years is the failure to make a positive case at home for multilateral European co-operation and in domestic political debates in the European Union to make the case for the economic policy reforms to which we are committed. The last thing that we think is desirable in these circumstances is for the British, yet again, to suggest that we are going to lead Europe, save these poor benighted continentals from themselves and tell them all what to say, as we heard from the Conservative Front Bench. That will not help anyone, least of all ourselves.
	The constitutional treaty, as the Statement said, was a necessary compromise. I have to say to the noble Lord, Lord Kerr of Kinlochard, that I regard the treaty as a curate's egg. I would happily have done without Part 3. Parts 1 and 2 would have been quite sufficient. Nevertheless, there are a number of useful steps forward. The achievement of a European Union of 25, to be extended to Bulgaria, Romania and the Balkans, and, in time, to Turkey, is a consolidation of European security, democracy and prosperity of which we should be proud and which I regret that the Government have made so little of so far.
	Can the Minister tell us whether the Government will now pursue some of the useful steps forward proposed in the constitutional treaty that do not require treaty amendment? The noble Lord, Lord Kerr, has referred to some of them, for example, the Council meeting in public in its legislative capacity, the strengthening of national scrutiny and so on. Do the Government accept that the most important thing to do now, in the pause that we rightly say we have to have, is to discuss the balance of policy priorities that we need for a European Union of 25? That has been the most massive failure of Chancellor Schroeder and President Chirac. After all, institutions exist to serve policy objectives, not simply for themselves. This crisis—which is not the first crisis that the European Union has had and will certainly not be the last—is also an opportunity to debate strategic priorities.
	We also ask Her Majesty's Government to do their best to combat the dreadful and negative Gaullist attempt to go back to the old stereotypes of Anglo-Saxon capitalism versus the European social model. There is no single European social model. The French model is not that which governs in the Netherlands, Sweden, Denmark or Ireland. The British economy is by no means the same as the American. It is perhaps an Anglo-Irish model, but followed to some extent by the Swedes, the Danes, the Finns and possibly even the Portuguese.
	As the Prime Minister comes empty-handed back from Washington later this week, perhaps the Government will admit that the only way for Britain to deal with such issues as climate change, global development, terrorism, international security and the management of the world economy is to work constructively, conscientiously and multilaterally with our European partners to maximise our influence in the world. We therefore welcome the Statement.

Lord Triesman: My Lords, I also start by paying tribute to Lady Blatch. I agree with everything that has been said about her. I share with the noble Lord, Lord Wallace, the experience of having come to the House—in those days, representing higher education lecturers—and having some very robust arguments with her, which she invariably won. She was a doughty fighter; she had friends and admirers on all sides of the House; and I join with all others in expressing our sympathy for her family and friends in this House and way beyond it.
	I shall try to do my best to answer the comments made from the two Front Benches. As the noble Lord, Lord Wallace, said, the Prime Minister is in Washington—which I imagine is one reason why he was unable to make the Statement in the House of Commons—dealing with preparations for the G8 conference. Incidentally, I have no reason to believe that he will come back empty-handed and I take that to have been a light-hearted comment, rather than a serious one.
	I want to dwell on some points raised by the noble Lord, Lord Howell. In many ways, I find it hard to understand the thrust of the argument that he put to the House. I think that he said that putting matters on hold is the worst option—I hope that I cite him accurately. Rather, he invited us to declare that the constitution is dead here and now. Most interestingly to me, he pleaded in aid the sentiments of French voters. I was in France last week and had a great deal of enjoyment from being cut off from English media and just watching French television and reading French newspapers.
	One thing was absolutely clear to me: the potential for a more liberalised market struck most of the French Left and large voting blocs within it as an erosion of arrangements that they wanted and a setback for what they called social Europe. I do not think that I have ever heard that model advocated with any great passion from the opposition Benches in this House, but it appears to have been advocated, at least to some extent, today. The question of enlargement to include Romania, Bulgaria and potentially Turkey was a significant issue in the poll in the Netherlands, where enlargement towards Turkey was thought to be a significant problem.
	The issue is really this: the treaty is plainly in serious difficulty. No one could possibly deny that. It is a moment to look at the implications in a very calm and measured way and to recognise as we do so that it is not the property of any one nation. It was agreed as a mode of moving forward by 25 member states and 10 of them have approved the treaty. I will not run through the list of those 10, but it includes Austria, Germany and Greece. For us to declare that we are going to stop the process before any of them have had the opportunity to discuss it or to reflect on the reasons that may have led to the defeats in the two referendums would create a division in Europe that would take decades to overcome, rather than being a route back to a semblance of health.
	However, I can give the noble Lord an assurance that he sought, which is that the treaty will not come back by the back door, as some newspapers have described the process. There will be a referendum on any constitution. That remains the Government's commitment; we repeat it. I know that my right honourable friend Jack Straw has repeated it today.
	We most certainly do not blame the people. I probably ought not to admit it, but if other noble Lords had been sitting in a small bar in a French village which, curiously enough for a rural area, voted yes—almost uniquely, I think—they would have heard and taken part in a rigorous discussion about many of the key features of the constitution, not some of the things that people in the media here have said were talked about. It was clear that decisions were taken by the peoples of those countries. Those decisions have to be understood and respected. That is why we need a period in which to consider them very carefully and ensure that we have understood what has been said—not least from the political representatives of those people.
	In response to the noble Lord, Lord Wallace, of course some useful steps may be taken, as long as we avoid the possibility that anyone should say that we are reintroducing the treaty by the back door. The issue about working in public is extremely strong. I also pay tribute to the noble Lord, Lord Kerr, for his maiden speech. I know that that is not strictly a matter for this Statement, but he raised such tremendously important questions. I cannot believe that the European Council would not feel that it might be right for national governments to scrutinise legislation rather more carefully in advance. There are things that could be done in the present circumstances to considerable benefit in Europe.
	We must discuss the balance of EU priorities and we need sound processes by which to do that; I confirm that. We most certainly should try to avoid the temptation on the part of anyone anywhere in Europe to see the process of liberalisation, the Lisbon process, as being in some sense hostile to traditions across Europe. The success of Europe economically will be dependent on being able to create economies with Lisbon process characteristics. If we do that, the prosperity of previous decades will be carried forward and, with it, if I may dare to suggest it, the sense of peace in Europe that we have enjoyed in a way that my parents and grandparents certainly never did.

Lord Brittan of Spennithorne: My Lords, does the Minister accept that many of us who share the view that the constitutional treaty would be good for Europe and good for Britain none the less think that, in current circumstances, to proceed with the referendum would be not only futile but counter-productive? Does he further accept that the right focus of the British presidency, about to start, should be to seek to persuade our partners to move away from constitutional and institutional issues and to focus on the problems of Europe and to persuade them to adopt the liberalising agenda and economic reform process that he mentioned? Does he also accept that the best chance of having any success in persuading them to do that would be to avoid the triumphalist tone that has characterised some of the debate in this country in recent days?

Lord Triesman: My Lords, if I may say so, those are very wise observations. There is no place for triumphalism—least of all when the peoples of countries have expressed their views. They are their views and we should not, to paraphrase Bertolt Brecht, say that this is the moment to change the electorate. Those sentiments are genuine. We can and, I am sure, will use our presidency to further the wider debates mentioned by the noble Lord, Lord Brittan, which are vital to Europe's advancement and should lead to greater liberalisation and a greater understanding of what makes for a prosperous economy. That must be the direction in which we try to take Europe during our presidency. I use the words "try to take Europe" not in the sense that I believe that we have a monopoly of wisdom but, rather, in the sense that a good presidency should provide guidance through difficult debates.

Lord Williamson of Horton: My Lords, I welcome the key phrase in the Statement that,
	"we see no point in proceeding at this moment".
	Does not the Minister agree that, as it is a fundamental principle of a union of sovereign states that all must ratify a treaty, there is absolutely no purpose in passing the parcel on the responsibility for the present situation? Evidently, the responsibility rests with the citizens of France and the Netherlands. They are absolutely entitled to take that view. So it is really back to basics for us. Our duty with our presidency is to carry forward the business of the Union on those matters which do not depend on the constitutional treaty; and that is a big enough task.
	Finally, I should like from these Benches to join noble Lords in expressing our sadness at the death of Lady Blatch and our appreciation of her contribution to the House.

Lord Triesman: My Lords, those comments in every respect are quite right. Let us make sure that we all understand the basic facts about the position we are in. It is true that all 25 states must ratify the treaty if it were to come into force; and the treaty specifically refers to ratification by all the high contracting parties, to enter into force only after all have ratified.
	That is plainly not the present position. Two of the founder members have decided not to ratify. I think that there is every reason to pause and to hear what their governments have to say in a full meeting of all those who own this treaty process; to hear the views of those 10 who have ratified, including one—Spain—through a referendum; and to make sure that we understand the entire dynamic before we plunge ahead. It would be very easy for almost any one of the 25 so to aggravate the others that any further progress was almost impossible. What on earth would be the merit in that?

The Lord Bishop of Chelmsford: My Lords, perhaps we on these Benches may also be associated with the remarks about Emily Blatch. The whole House not only had huge respect for her skill in the contributions she made to this House but I am sure also carried a great deal of affection for her as a human being. Our thoughts and prayers are with her family and friends today.
	Will the Minister accept that there is at least one piece of good news in all of this? That is, the people of Europe want a say. Will he note that a higher percentage of people turned out for the referendums in France and Holland than bothered to vote in the general election in this country? I am told that up to 10 per cent of the people of France had read the whole of the constitution. Given that we all accept that having a referendum may not be the most sensible thing to do in the present context, how do the Government propose to help the people of this country to get their minds around the choices and issues that face us in Europe today? Will he accept that, at a moment of difficulty and even division, reaffirming the common values and vision that hold us together and which have brought us together in European life is very important from those who exercise leadership in our country?

Lord Triesman: My Lords, I agree with the right reverend Prelate. The Government have perhaps done a little more than he allowed in his comments. There have been two documents—one rather long and one relatively short—both of them very readable and one of which even won a prize for being in readable English, which is worth noting on the occasions it happens. It is also quite right to point out that a great deal of attention was given, certainly in France as I can say from firsthand experience, to the treaty. It was either the second or the third best selling book in France during the whole of the run up period. That is not the same as saying that everybody read it, but it is very interesting to note just how much attention was given to it.
	I believe that during our presidency we will continue to try to provide a great deal of information, not least to accomplish one of the goals that the noble Lord, Lord Brittan, described of making sure that some of the most fundamental debates are aired properly. It is essential that that happens.

Lord Dykes: My Lords, perhaps I may ask the Minister to make sure that this time it is not just lip service to the main arguments for our membership of the European Union. Does he not agree that we are now in the aftermath of 26 years of neglect about untruths, distortions, not telling the facts about Europe and our membership of the Community? That is one of the reasons we are in this plight, with the colourful right-wing comics that masquerade as newspapers having a field day of triumph saying that Europe should stop completely.
	The Government therefore have a very strong obligation not just to say that they will do things up to the summit and afterwards, but to have a formal programme of information and explanation for the British public about all these complex issues for when the time comes to make whatever revised decision is necessary. We have, after all, to respect those two votes that have just occurred in the two referendums. When that time comes the British public will know the full facts and not just the terror propaganda in the British newspapers.

Lord Triesman: My Lords, I said a few moments ago—and I hope the point was thought at least reasonably sensible—that we have published two significant documents. Over the years politicians of all parties with European interests at heart have done their best to make sure that there was a debate about substantive issues and not about straight bananas. We should continue to do that. I am strongly committed and the Government are strongly committed to ensuring that there is very thorough debate.
	Perhaps I may observe that debates on European questions—and this Statement is an interruption of a debate on European questions—do that. We all have a lot more to do in making sure that we try to engage the media. The media are the media we have got and we will have to try to engage them more thoroughly in these vital issues.

Lord Clinton-Davis: My Lords, does my noble friend agree—I am sure he does—that Lady Blatch was a lovely person? Does he also agree that as a consequence of what has happened in France and Holland over the past few days there is a risk of going back to the bitter schisms and rivalries which scarred Europe for so long?
	Therefore, is it not vital that we should stress the reasons for bringing Europe together in a way that we have neglected over the past few years? I stress, as one who was engaged in the European Year of the Environment, that young and old people were brought together in a way they understood. It is vital when we talk about climate change and all those other areas which have been stressed today. I think that if we go back to fundamentals the case for Europe is stronger than ever.

Lord Triesman: My Lords, I would hope that the processes that have gone on in Europe over the better part of five decades have drawn us together as nations in a sufficiently strong way to make unlikely the kind of very deep and bitter schisms that have scarred European history.
	However, of course it is always right to try to make sure that differences do not become deep scar tissue. In order to do that, we will need to look at the areas in which we have been able to co-operate and work effectively and to make sure that in areas where reform is necessary and where deep debate is necessary we face those deeper debates as friends and work on them as well rather than wishing that those differences were not there.
	On economic reform, institutional reform and most certainly environmental policy reform, we have to be realistic. But we must surely have a basis for that on the grounds of the history that we have managed to achieve together in five decades.

Lord Kilclooney: My Lords, now that the referendum has been put on hold and there is a gap in our political programme, may we have another referendum instead, on joining the euro?

Lord Triesman: My Lords, no. The referendum commitment—were we to think of joining the euro—comprised the five tests that the Chancellor of the Exchequer has set out to be met. Were they to have been met, that would be the appropriate moment for that question.

Lord Waddington: My Lords, may I ask the noble Lord for a clarification of the assurance that he has already given? Can he give us an assurance that the Government will not agree to the implementation of any part of the constitution unless and until the treaty establishing this constitution is ratified?
	In particular, will the Minister give an assurance that the Government will not agree to the establishment of a full-time European Council president, will not agree to a Union minister for foreign affairs and that there will be no nodding through at a European summit of the various extensions of majority voting provided for in the constitution? If they were to agree to any of those matters, they would certainly not be observing their promise that there will be a referendum, if any part of the constitution is to be implemented.

Lord Triesman: My Lords, I had hoped that I had answered that question directly earlier. I do not believe that any of the measures that the noble Lord has just mentioned could possibly come in without ratification of the treaty. They are all specific and new requirements of the treaty.
	I wonder if I could pose a rhetorical question. Were it to be the case that the Council of Ministers concluded that its business should be conducted with television cameras in the room, or other fundamental discussions were to take place in a spirit of openness and transparency, my assumption would be—given what has been said so frequently in the House—that we would say, "Quite right", and we would welcome it. We would not require a referendum before the electric plug was put into the camera.
	I put that point not in a particularly light-hearted way, but because some of those improvements are exactly the kinds of improvements needed to bring the people of Europe and the institutions of Europe closer together. I would think, given the traditions in the House, that they would be welcome.

Lord Maclennan of Rogart: My Lords—

Lord Stoddart of Swindon: My Lords—

Lord Howe of Aberavon: My Lords—

Noble Lords: Howe!

Lord Stoddart of Swindon: My Lords, it seems, having listened to the debate so far, that we want to change the rules mid-stream.
	What this Statement should have said was that the constitutional treaty requires ratification by every one of the member states, now 25, before it can come into force. In the last week, however, as the House and country are well aware, in referenda the electors in France voted "No" by 55 per cent to 45 per cent and in the Netherlands by 62 per cent to 38 per cent. The treaty is therefore dead. It is dead. The European Union Bill will be withdrawn and will not be reintroduced. That is what the Statement should have said under the existing rules and the law of the European Union. Since it has not said that, could I ask the Government whether they will now seek the opinion of the British people by immediately introducing a simple Bill to have a referendum, certainly by October, so that the views of the British people can be tested and they can give their opinion, which will help the Government in their further negotiations?

Lord Triesman: My Lords, no, we will not be introducing any such Bill, for the reasons that I gave in the Statement.

Lord Maclennan of Rogart: My Lords—

Lord Howe of Aberavon: My Lords—

Lord Willoughby de Broke: My Lords—

Noble Lords: Howe!

Lord Howe of Aberavon: My Lords, I am grateful to the noble Lord.
	Is the Minister aware that I am probably not the only Member of this House who has some admiration for the moderate and balanced way in which he has been presenting the matters he has been dealing with this afternoon? Many of us share the anxiety about the triumphalist note, which was referred to by the noble Lord, Lord Morris, in the opening Statement.
	Likewise, is he aware that I certainly would repudiate the idea that we should now all be making absolutist statements, such as the one we have just heard from the noble Lord opposite and, indeed, with great respect, some of those heard from my real and noble friend Lord Howell of Guildford?
	Is it not important to follow some of the objectives identified by the noble Lord, Lord Kerr? He showed himself able to prepare a much better speech for himself than he often succeeded in preparing for me. That, I may say, is intended as a tribute. He has excelled all his earlier performances.
	If I may give an example for the noble Lord, as long ago as 1985 my noble friend Lady Thatcher and I succeeded in implanting in Part III of the Single European Act the initial proposals for enhanced political co-operation in the European Union. Since then, successive Councils and governments have succeeded in making further progress in the same direction. My noble friend Lord Patten, in concert with Mr Solana, has been making some headway with that in recent years. Is it not important that we should recognise that, although the people of France and the Netherlands have, understandably, reacted to the arrogant overconfidence with which the elite are sometimes perceived, we do not mistake that for a signal to repudiate all the efforts that we have made in the past for closer European co-operation—not just in the field of foreign policy, but in other fields as well?

Lord Triesman: My Lords, I welcome those comments. Until a few moments ago I was going to ask the noble Lord, Lord Kerr, whether he would mind writing any of my speeches, but given that that was apparently such an unusual one—no, I do not mean that at all. It was an exceptional speech.
	The process by which the European Union has opened up its political institutions may have been slow and, on occasions, may have been painful. It certainly went past some important milestones, of which 1985 was one. I think—most seriously—that some of the elements that the Council could adopt, which would open processes still further, would give national parliaments clearer rights, and in the right sequence in the legislative process, and can only be of huge benefit. They will carry the dynamics that have been exhibited over the years forward, in the right direction.

Lord Willoughby de Broke: My Lords, will the Minister please answer the question—

Noble Lords: Time is up.

Lord Willoughby de Broke: Time is up, my Lords, so I will ask in the debate instead.

EU: Future Financing (EUC Report)

Debate resumed.

Lord Inglewood: My Lords, like the other speakers in the debate, I shall begin by commenting on the constitution. Although I am not clear whether there is a consensus in your Lordships' House about whether the treaty is dead, it seems clear that it will not come back, and that its contents—both good and bad—will not be considered further by us in that form.
	The report that the noble Lord, Lord Radice, introduced for debate today was very timely in the context of the financial perspective, but because of the events of the past few days elsewhere in the Continent it now has wider significance. It sets out a logical and coherent budgetary analysis for a European Union that will not develop into an embryonic super-state. If, as I believe is desirable in an interdependent world, we must have proper systems for taking decisions that affect us all together, there is frequently a fair case for making certain budgetary transfers as part of that wider process. The European Union budget should deliver that in the context of the whole of Europe. That expenditure must be firmly set within the framework of how much money is involved and on what it will be spent. In turn, that framework must be founded on the principles of basic equity.
	One of the most important aspects of the report is the emphasis on the principle of subsidiarity, to which is always attached that of proportionality, which is less often talked about and is not to be muddled with it. Those ideas have been applied, albeit not as rigidly as they should have been, in the legislative context but they are equally important in the area of expenditure. I believe, as the report emphasises, that the test of value-added should be at the forefront in decisions about expenditure at European level. Furthermore, those in turn should be contained within a framework that is not merely contextual but part of a formal set of arrangements of checks and balances around which Community spending decisions are taken.
	It follows that the proposals described in the report about, for example, regional policy, research and development and some aspects of trans-border educational systems seem to meet that test of appropriateness. On the other hand, there is no case now for the way in which the common agricultural policy, which needs further reform—I speak both as a farmer and a non-executive director of an agricultural supply company—of the way in which it has a right of pre-emption over European Union spending. There is an element of truth behind the proposition that the CAP is the French rebate.
	That brings us to the question of the United Kingdom's rebate, which, as its opponents often seem to forget, only came into being because of a fundamental injustice accorded to our country. Against that background, there is surely no reason why it should not remain, unless and until that fundamental injustice is eliminated.
	Given that there are budgetary corrective mechanisms in place in respect of other member states' contributions, there seems to be a case for the whole European Union taking the issue a trifle more seriously in general than it seems to have been doing. What matters here is not the particular mechanism but rather the underlying equity, or inequity, of any member state's gross and net contributions. Our Government must be unbending and unyielding in that matter.
	One aspect of the debate about the European budget that I have never fully understood, during the entire time that I have been interested and involved in European affairs, is why some argue that European taxes should be collected directly from the citizen. There is an argument that it brings the European Union closer to the people—that is, at best, arguably true—but it is certainly likely to make the European Union more unpopular. I cannot see why Europe cannot and should not collect its revenue through a system of precepts. I am very pleased that the report reaches a conclusion very similar to my own views.
	As the noble Lord, Lord Barnett, said, the great challenge facing our country today is economic—globalisation, in particular. The document rightly touches on the Lisbon agenda, but, as I have said previously, contrary to what many in this country seem to think, the European Union is not primarily about money; it is about laws and rules. The first imperative must be that the laws and rules enable our country and our partners to compete globally in the wider marketplace. Europe's expenditure programmes must run with the grain of those other programmes; at the same time, they cannot and should not attempt to replace, or even to substitute in any form, member states' programmes. We must recognise that and set our thinking about Europe's future spending within that wider context.
	One of the obvious conclusions touched on earlier about the recent referenda across Europe—I refer not only to the Dutch and French constitutional referenda; it is also true of our own country—is that there is a sense of alienation between the voter and the administration. The framework within which European expenditure is carried out is about as arcane as one can get; hence, the proposals discussed to link the financial perspective to a particular commission and to the European Parliament should be welcomed. However, I confess that I sometimes suspect that the body that should have its reputation harnessed to expenditure and almost everything else that the European Union does is the Council of Ministers. After all, member state governments are the prime force and movers at work in the European Union.
	Since the constitutional treaty in its present form seems to be dead, in one sense it does not matter whether it was a good or bad proposal. We are back to where we started. We cannot, and we do not want to, remain where we are now. Nevertheless, it is clear that in a world where we need change, the alliance of forces that prevailed in France and the Netherlands is inherently unstable. That particular alliance has not a very long lifetime ahead.
	I believe that we will see a lot more debate and discussion about what happens next. The significance of this report now is that it is an important contribution towards getting something better next time. My noble and learned friend Lord Howe, commenting about the magisterial maiden speech of the noble Lord, Lord Kerr, said that practice makes perfect. Perhaps, in the words of the noble Lord, Lord Kerr, it is a case of sero sed serio.

Lord Lea of Crondall: My Lords, the contributions so far have demonstrated how extraordinarily timely the report is. I congratulate my noble friend Lord Radice and his committee on it. I echo the noble Lord, Lord Barnett, in welcoming the maiden speech of the noble Lord, Lord Kerr. We look forward to hearing his contributions in the House.
	On the referendum, I wish to quote a statistic that adds a certain twist. The analysis of who voted which way in France and the Netherlands shows that 80 per cent of blue-collar workers voted "No" and generally the professional classes voted "Yes". I regret that, and it gives us pause for thought, but I gently suggest that it may be something to do with worries about job insecurity and so on. The idea that the answer to the question, "What do we want?", would be, "We want to join the Bruges group", is perhaps a misinterpretation. I hope that our own Government take that message to heart.
	Now that we are where we are, it should be asked whether it was a very bright idea to have an exercise comprising the word "constitution" in the first place. I said privately throughout, and I say in public now, that I do not think it was a very bright idea. To have such a shibboleth about the United States of Europe—Philadelphia 1776 to 1787 and all the rest—rings all the wrong bells, not only in Britain, given our history of common law and so on, but everywhere. It is like asking people to approve of the modern world. When asked whether they like the modern world, most people will think that it could be improved and will therefore say no.
	It is very natural to say, "I do not like that bit and that bit". As the noble Lord, Lord Kerr, said, it was a package deal. But people are normally asked to vote for a package deal of legislation, in legislatures, through parliamentary democracy. So, it was not a bright idea to have an exercise with the word "constitution" in it, and it was certainly not a good idea to go down the road of having a referendum. One can always paraphrase Churchill to some effect: the substance of the treaty may not be perfect, but it may be better than the alternatives.
	The report stands for itself. I do not think that, when things have settled down, the problems in Europe will be as cataclysmic as has been suggested in some quarters. The noble Lord, Lord Howell of Guildford, will have his chance later, but I do not think that it was wise of him to introduce the question of whether the euro was now shaky. I would put my money on the idea that the euro will be here for our lifetime. More countries will join the euro, and the Chinese have put more reserves into the euro. This is not the time to say that the euro is shaky.
	The idea of keeping the budget in isolation from the purposes of the European Union is wrong. To those who have emphasised the wider purposes of the European Union, I offer one example: climate change. There is not much difference between a European energy tax and a commitment from each country to do certain things to reduce carbon dioxide emissions over time. Call it what you like, it is a fiscal understanding to change relative prices. That is the same job as taxation will do. One might also mention the role of value added tax.
	I turn to the two main elements in the excellent report: the size of the European budget and the UK's contribution. I add one feature that connects the two: the role of structural funds—the European Social Fund and so on. I am not quite in line with the report on scrapping the structural funds as far as the whole of western Europe is concerned. The Treasury may have dug its heels in a bit too far on both subjects.
	First, there is the size of the European budget. The Treasury often overplays its hand and has done so on this occasion. I have two reasons for saying that. If you look at the table on page 11, which shows the current financial perspective, you will see a 50 per cent rise in development aid. The noble Lord, Lord Hannay of Chiswick, asked Douglas Alexander, who was trade Minister at the time, what he would cut if he wanted to increase that figure further. He did not get a very satisfactory answer.
	Last week, we saw the Ministers agreeing to double aid to Africa under the European umbrella—certainly, it was European Ministers making the agreement—from £20 billion to £40 billion. In a normal budgetary procedure within a country, you know how expenditure will relate to income as you are doing the exercise. It is much more difficult to do that here. In the "Europe des patries" that everyone advocates, people will always vote for the things that they want, without considering the amount of money available.
	It was significant that, this weekend, the Financial Times ran a report that Chancellor Schröder was moving a bit towards the position of the Luxembourg presidency, which has come up with a scheme based on a figure of—I speak from memory—1.06 per cent. I echo the timely observation by my noble friend Lord Barnett that the European budget has grown extremely slowly in comparison with all the national budgets in the EU, in particular the budget in this country, under both governments. We must avoid too much rigidity in our negotiating position on the overall size of the budget. Somewhere between 1 per cent and 1.06 per cent—to split the difference again—is where things should work out.
	In its response to the report, which we got only in the past few days, the Treasury is guilty of cherry picking. It is highly commendatory of things that are in line with government policy, without recognising that the report is itself a package deal. The Treasury is very good at saying that some things are there on their merits and are not part of a negotiation.
	We must reflect a little on the nature of European negotiation. European negotiation is nothing like running a nation state. It brings out all the worst features of the rivalry between countries. I sometimes wonder whether we are not shaping up, over the next 10 years, to rerun the battle of Agincourt. I have done some research on it—I was never good at history at school—and I notice that, in 10 years' time, we will have the 600th anniversary of that battle. I would bet your Lordships a lot of money that it will be a great celebration in this country. I must also point out that the history books tell us that, in 1453, at the end of the Hundred Years War, we were totally cleared out of France. You do not need to be the French ambassador to draw attention to that endgame.
	Before we discuss how to deal with the balance between the common agricultural policy and the rebate, I shall say a word about the structural funds, the European Social Fund and so on. It is remarkable that, as is mentioned on page 28, for 92 per cent of the population of the new member states, the relevant GDP figure per head is below 75 per cent of the EU average. It is rather confusing to have, on the same page, a table showing purchasing power parity. Those who know a little about how to work out GDP—exchange rates versus purchasing power parity—know that you cannot mix the pudding in the way that, I am afraid, the report has tended to do.
	There was an extraordinarily interesting piece of evidence from the combined Cornwall local authorities and universities. It is on pages 35 to 41. The question posed by the committee about the structural funds was, "Why do something through Brussels, when you can do it here?". I shall make a couple of points about that. There may be some benchmarking value in learning best value from other parts of Europe. There have been some innovations, and Cornwall is benefiting. Combined Universities in Cornwall and some of the policies for getting people back to work have a six-year—it may be nine-year—guarantee of funds. They can do things under the structural funds and the European Social Fund that we have not been able to do in this country. Before we take the position that the only question is equity and ask, "Why should the rich countries of western Europe be in receipt of structural funds?", we should take that point into consideration.
	There is a certain naivety among those who preach from a distance about how people ought to forget about the juste retour and all the rest of it. A degree of political ownership of the European enterprise, such as I have mentioned in Cornwall, is not a consideration to be sneezed at. We should not throw out that baby with the bath water.
	As regards the budget rebate, it is worth reminding ourselves that the problem arose because we did not join the EU/EEC at the start. In 1969, Customs duties and import agricultural levies were made the heart of the income side of the equation. When we joined in 1973 we were stuck with it; hence, Harold Wilson, renegotiation, the referendum, and all the rest of it. But it would not have been sorted in that way if we had been present at the start, and that moral should always be borne in mind.
	We have therefore got to look at the balance between further changes in agricultural arrangements and whether the rebate should be on the table. Interestingly, the same article that mentioned Chancellor Schröder said that the Luxembourg presidency had talked about a cash freeze on the rebate. That may be worth thinking about for the sake of taking the debate further forward. In other words, we would not lose any of our rebate, which I know will not be popular, but people have got to look at where there might be some room for manoeuvre.
	In our agricultural arrangements, it is true that we do not get too much back. However, we should bear in mind that when we put forward a package deal but the French Government cherry-pick the report from my noble friend Lord Radice and say, "Ha, there are important voices in Britain ready to look at the rebate"—which is true—it would occur only as a trade-off with a very considerable reduction in the amount of agricultural spending.
	Apropos the Battle of Agincourt, the entente cordiale centenary celebrations were only a couple of months ago. We must have a new and more civilised relationship with France. We cannot say that national parliaments should have a major role in discussing European questions without opening up the question in a "Europe des patries". Why do we not have a joint parliamentary committee with the French Parliament to look at some of the questions between us? We ought to have such a joint committee and recognise that parliaments have a role that is separate from governments. It may be easier for parliaments to get to grips with some of the issues without the amour propre between Tony Blair and President Chirac which has clearly got in the way of a more sensible relationship between Britain and France.

Lord Willoughby de Broke: My Lords, I rise with some trepidation as a Euro-realist thorn among this bouquet of Europhile roses to put a slightly different view on the report. When I bumped into the noble Lord, Lord Barnett, before the debate I promised him that my speech would be almost entirely gloat free, which it will be.
	I agree with a lot of what has been said in this excellent report. I congratulate the noble Lord, Lord Radice, and his committee on the report, which comes to some very sensible conclusions. I nearly said "surprisingly sensible" conclusions: I could have written some of them myself.
	Jumping straight to those conclusions, first, after a merciless slash-and-burn attack on the CAP, the report asks at paragraph 58,
	"why must support for farmers in Europe be largely or wholly financed at the European Union level?".
	It concludes that a move towards national financing of CAP subsidies would,
	"do much to eliminate budgetary imbalances between Member States".
	That is history in the making. I remember saying that for years during our debates on the CAP, only to be told by successive Ministers from both parties—I see the noble Lord, Lord Whitty, sitting on the Back Benches—to go and lie down in a dark room until I felt better. Now, the very idea that we should repatriate the common agricultural policy seems to be accepted by the committee, and I am delighted.
	But it gets even better. The report is rightly dismissive of the structural and cohesion funds; that is, the bribes paid by rich countries to poorer countries to persuade them that the EU is "a good thing". About those slush funds, the report states:
	"There is a strong belief among those involved in these projects that they add value"—
	the report goes on to observe with an exquisitely straight face—
	"but evidence to justify this belief is not conclusive".
	In committee speak, that means that it is total hogwash.
	The report gives the final quietus to the slush funds in paragraph 150 of its conclusions, which states:
	"Using the same logic which argues for shifting the burden of financing the Common Agricultural Policy back towards the Member States, we believe there is a strong case . . . for . . . governments to fund and manage their own regional policy".
	Who am I to argue with that? It is a brilliant conclusion.
	Having slaughtered two of the EU's fattest sacred cows—the CAP and the structural funds—the committee turns its humane killer on the Lisbon agenda, which was, as far as I can remember, supposed to make the EU the most competitive economy in the world by a certain date. It does not matter by when because it is just a wish list. It is rather like a child's letter to Father Christmas, which says, "I want a competitive economy, a fire engine, an IT policy and a doll's house". It is as ludicrous as that.
	The report concludes correctly that,
	"The Lisbon Agenda is mainly a Member State initiative . . . Most policies that are needed to achieve Lisbon—
	this is important—
	"do not require public expenditure at EU level or indeed public spending at all".
	End of story.
	So, with three sacred cows efficiently dispatched, what is left in the report? The answer is: not very much. There is a bit of R&D, a bit of infrastructure and a nod towards EU propaganda—sorry, I meant to say education policy—and that is about it.
	Serendipity has it that we are debating this report only a week after the people of France and Holland have blown a comprehensive raspberry at the whole idea of the EU. The referendum shockwaves mean that the EU can never again be quite the same. The days of increasing centralised power in the hands of unelected Eurocrats are gone. We can safely ignore the posturings of Mr Mandelson and his fellow commissioners that it must be "business as usual", which they are saying at the moment.
	Of course, the Commission and the rest of the EU "apparat" are in favour of business as usual. That is where their salaries come from, where they get their expenses and where their houses come from. That is where all of the little perks that they enjoy so much come from: travel, budgetary costs, limos and chauffeurs, not to mention their huge inflation-proofed pensions. They would be mad not to defend all of that, as most of them would be unemployable in any other job at remotely the same sort of salary.
	All of that was swept away in those two memorable days. Now is the moment for Britain to stand back and look to its national interest. What is the EU for? Should we be part of it? We have to ask those questions. The whole grandiose project is now in question, and not before time. The British people were never asked—in spite of what was said by some Europhiles in questions on the Statement—if they wanted the project. It has been stuffed down their throats by successive governments.
	The last time that we had a vote on Europe in this country was 30 years ago. I want to underline that to the Liberal Democrat Benches in particular, because they seem to have a mental block about it, that it was a vote on whether we should remain in what was then the Common Market—no more. The British people have never agreed—they have never been asked—to hand over power to what the noble Lord, Lord Rees-Mogg in his article in today's Times calls "the bureaucratic prison-camp" of Brussels by ever-increasing use of QMV. We have never voted for EU citizenship because we were never asked. We have never voted for a common foreign defence policy, for an EU army, for the Social Chapter or for having 70 per cent of our laws made in Brussels to be interpreted and enforced by the European Court of Justice. We were not asked if we wanted a common fisheries policy or the European Parliament. We were not asked if we wanted the European arrest warrant or a European public prosecutor.
	Now is surely the time to take stock. The internal tensions in the EU are becoming irreconcilable. The European social model, about which we have heard a little today, is self-evidently a failure. It has produced only mass unemployment, high taxes and low growth. In spite of what the noble Lord, Lord Lea, said, the euro is in big trouble. One has only to look at the financial markets to see that. Germany now admits that the whole thing was a ghastly mistake, but remember that the Germans were not even asked if they wanted to abandon the deutschmark.
	Last Thursday, the German magazine Stern reported that German finance Ministers were briefed by Morgan Stanley's chief eurozone economist that,
	"the risk of a euro wreckage has risen significantly".
	I assume that that is a translation. Moreover, an Italian government Minister, for welfare I think, has been directly reported as suggesting that the lira be reintroduced as soon as possible.
	We are paying £12 billion a year into the European Union coffers; £12 billion a year to be members of this failing club. That represents £35 million every single day of the year, including bank holidays. Indeed, by the end of this debate we will have paid in £2 or £3 million more. Could someone tell me why? We have never been given an answer to why all this expenditure is so valuable. I think that the noble Lord, Lord Radice, said in his opening remarks that it represents value for money, but he did not tell us why it does so. The Statement, on which we were able to ask a few questions, said that our membership of the European Union is "central to the UK's prosperity". While that can be said, it does not tell us why it is central to our prosperity, because of course it is not. The government myth that we would lose millions of jobs and masses of exports were we to stop signing the cheques has been exploded in a number of studies, most recently by Professor Patrick Minford, who I believe gave evidence to the committee. His most recently published book, a copy of which I have ensured is in the Library and which I strongly recommend to all members of the committee, is entitled Should Britain Leave the EU? An Economic Analysis of a Troubled Relationship. These studies show that far from being in our interests to remain in the EU, it is a fact that we cannot possibly afford to remain in it. Indeed, it goes against our financial interests to do so.
	I suggest, therefore, that this House should request either the EU Select Committee or a special sub-committee to examine dispassionately the merits and demerits of our continuing membership of the European Union. All the evidence is there; it is in the public domain now. I can think of nothing more important to our freedom and independence than to hold this debate, and to hold it now.

Lord Whitty: My Lords, I along with everyone else am grateful, as always, to the noble Lord, Lord Willoughby de Broke, for sharpening up the debate and providing balance. But those of us who perhaps feel a little humble these days from a pro-European point of view, in the light of recent events, nevertheless have been helpfully reminded of the opposite point of view held in this House and elsewhere, and how dangerous it would be for this House, the Government and the people of this country to follow the line urged on us by the noble Lord.
	When I first decided to put my name down for this debate as a sort of reintroduction to the Back Benches—it is my first Back-Bench speech for eight years, made without a Civil Service brief and the comfort of leaning on the Dispatch Box—I thought that it would be a relatively quiet affair. But since the subject was first scheduled, things have changed dramatically. I congratulate the committee, and in particular my noble friend Lord Radice, on the clarity of the report and the Government on their response. I also congratulate the noble Lord, Lord Kerr, on his maiden speech and contribution to the debate.
	Some clear issues and important dilemmas have been raised. But the earthquake which has taken place in Europe over the past few days means that the situation which the British presidency will now have to deal with is set against a context which is far more important than simply budgetary matters, although we would always have had to deal with decisions on the seven-year financial perspective. As many noble Lords, including the noble Lord, Lord Kerr, my noble friend Lord Barnett, the noble Lord, Lord Inglewood, and to some extent even the noble Lord, Lord Willoughby de Broke, have said, this budget is in a sense the shadow of what Europe is for: who pays for it, who benefits, what usefully can be done at the European level, and what cannot be done. It is time for that debate and it is time for Members of this House to address those issues.
	My original intention was to make a few arcane remarks about the common agricultural policy, about which until recently I was obliged to know rather a lot, and then add to that a few general remarks on matters about which I know rather less. That is the normal course for debates in this House. But I think we now have a more serious issue to address. Nevertheless, I want to make a few correctives in relation to the CAP itself.
	I think that the degree to which the CAP has already been seriously reformed is underestimated. The Government's achievements, in particular those of Mrs Margaret Beckett, have been under-acknowledged in this regard. We have decoupled all support for the production of the main crops in northern Europe. That is a great benefit. We have therefore ended the spectre of expensive over-production. As a result of that, we have by definition automatically eliminated many of the export refunds and subsidies, which is important for the development agenda of the WTO. The support we now give to most of European agriculture is Green Box in WTO terms. That is important as we go into the vital Hong Kong negotiations at the end of the year.
	All this has been achieved by attaching the support we continue to give to agriculture, land management and rural development to environmental outcomes and conditions, which would not otherwise be achieved. We have also managed to enhance the European budget for rural development, perhaps by not as much as we would have liked, but it is still a significant benefit. As a result, people need to recognise that we now have a system of land management support which is closer to saving land from desertification and abandonment, and we have brought an end to the vision of large swathes of Europe being pushed out competitively from producing food and agricultural products.
	There is an argument, made in part in the report and in part during our debate, that that kind of support ought to be given at the national level, and to an extent I share that view. Part of the 2003 deal on the CAP was a degree of repatriation, if I may use a politically incorrect term—or renationalisation, which is probably even more politically incorrect. A lot of the decisions on how the expenditure is made has been brought down to the national and sub-national level. It is interesting to note that many of those who usually object to the centralisation of Brussels now object to the fact that the situation in England is now different from that in France and, indeed, in Scotland. However, that is what subsidiarity is all about. The terms on the payment have already been brought back to the national level and the issue is whether the substance and quantum of that payment should also be brought back to the national level. However, people should not kid themselves. If we do bring significant parts of agricultural policy back to the level of national decision-making, as the committee has effectively suggested, there will be an expenditure on the national budget which would not be unadjacent to the expenditure we currently channel through the CAP.
	Not all of the CAP has been reformed. Big issues remain in relation to sugar and, as always, there were some bodged deals at the end of the negotiations. There is a long way to go in certain respects. However, we are clearly on the road to making agriculture no longer a huge anomaly, but simply an issue of whether the EU pays for it, subject to national rules, or whether nations pay for it and make their own rules.
	The rural development budget, known as Pillar 2 of the CAP, is somewhat different. It has been financed by transfer out of the production-related part of the CAP into rural support. We were strongly in favour of that move. It requires heavy funding, but it addresses the real problems faced by European rural communities and economies; namely, issues of diversification, the agri-environment, the need for training in rural areas and the need for the rural economy as a whole to adjust to changes in agriculture and employment in rural areas.
	Not all of the provisions of the rural development regulations have been supported or drawn on by the UK. Indeed, we have had a less than adequate return in rural development, but it is an important provision. However, again, if that budget should be subsumed and subjected to some degree of subsidiarity at national level, similar kinds of expenditure would be required from the national exchequer in order to meet the needs of rural communities, rural employment and the rural environment. So there would be no free lunch by abolishing the CAP.
	In a sense, this also applies to the remainder of the report. There are a number of perversities, if you like, in the present situation and rather ticklish issues that we would have to face if we adopted the suggestions in the report in their totality. As my noble friend Lord Lea has already said, some of them relate to the rebate and how it operates and some of them relate to the interplay between the implementation of subsidiarity and the rules on state aid. By definition, expenditure at EU level is, to a large extent, exempt from the state aid rules because it is European expenditure. It may be subjected to and influenced by the state aid rules, but it is exempt from them. Once that expenditure at EU level stops and becomes the responsibility of the national exchequer, it will be subject to the constraints on state aid to national industry that apply to industries other than agriculture.
	I accept that the CAP has been too large a part of the budget and that it continues to be so in the Commission's proposals for the next financial prospective. But some of the perverse effects which relate to agriculture also apply more widely. I realise that the rebate is a deeply sensitive and delicate issue, as the committee put it, but one of the effects is that because money for the rebate goes to the Treasury whereas expenditure would go to individual department programmes—and, indeed, savings by any individual department go to the Treasury rather than to the department—there is a tension within national governments, in particular within the UK Government where the Treasury takes a hard line. Hence, if the EU comes up with proposals for spending from the European budget in the UK, the Treasury loses on the rebate—pound for pound, euro for euro—and therefore its instinct is to oppose it. Indeed, the more disproportionately the UK benefits from a proposed expenditure or a shift of expenditure within the EU budget, the more vehemently the Treasury opposes it.
	It is true that wise Chancellors and wise Treasury Ministers—such as those we have at present—have, on occasion, on important issues, overruled the instinctive and natural view of Treasury officials. But as long as the rebate is there, the natural instincts of Treasury officials are entirely rational. However, I would argue that they are not to the benefit of the UK. Hence, if the UK were to take more from the rural development regulation, for example, than we have hitherto, it would be offset against the rebate, and there would be serious hesitation in parts of Whitehall in relation to that. The same applied, to some extent, when we were engaged in substantial expenditure within the UK on structural funds. So there are problems about the way in which the rebate operates in terms of defining our objectives.
	There are also serious political problems at EU level in regard to the rebate. I can remember talking to a wise and senior member of the Dutch Labour Party 10 years ago, just as Holland was about to move to becoming a net payer into the EU budget. He said, "You will find that the unconditional support of the Dutch people for the EU project may begin to wilt a bit at this point". It took a little longer than he said, but last week proved—in part at least—that that was true.
	Equally alarming is the attitude of the eastern European countries which, in most circumstances, are staunch allies of much of the British position in many fields. Their view is that the poorest members of the EU should not continue to pay for one of the richest. So what was justifiable when Britain was the 10th or 11th poorest country within an EU of 15 is much less justifiable when the UK is the fourth or fifth richest country in an EU of 25.
	The answer to this—which the Commission has partly grasped and which the committee rightly rubbished—is a general corrective mechanism. The Commission's own proposition is based on the illogic of the current position and therefore, rightly, the committee has said that this is not acceptable.
	But there are other kinds of corrective mechanism which might be acceptable. If it was based on a GDP per head basis, if there was a limit on the total net contribution of all net payers, and if it was on a tapering basis rather than a pound for pound reduction, it might avoid some of the perversities of the effect of the rebate and receive a reasonable amount of support across other EU countries.
	Unless we get, in the longer term at least, an understanding that Britain is not unique in this respect, and unless the mechanisms that come out of the next financial perspective are acceptable to the totality and are not simply a defensive position of the UK, there will not only be a continued attack on the British rebate but we will not get reform of the common agriculture policy or greater subsidiarity in other areas of expenditure in the EU.
	My noble friend Lord Radice and I have many things in common, one of which is that we were pro-Europeans in the Labour Party when it was fairly unpopular—since before the referendum. Others have changed their opinion—one or two have been obliged to change party over the issue—and parties have changed their opinion, but we have stayed more or less where we are. Last week was a disappointment to us, but it is a disappointment which presents the British presidency with a major opportunity as well as a major challenge.
	Finance is a significant part of that, but it is not the totality. The institutions of Europe have, in part, failed to deliver the expectations put upon them by pro-Europeans and by the European people. But, ultimately, the issue is one of political will, not of the institutions themselves—as the noble Lord, Lord Wallace, said during questions on the Statement earlier—but of the political leadership of Europe at national government level. That will be embodied in the British presidency over the next six months. If the British presidency can find some creative and clear-sighted solutions—not only to the constitutional issue but also to the budgetary issue—which place us on firmer ground for the longer term, it will be a great European achievement for this Labour Government. It is one which many of us were hoping for and expecting in 1997—we have been slightly disappointed in some respects since—but which we still believe is deliverable by this Government over the six months of their presidency.

Lord Maclennan of Rogart: My Lords, it is a great privilege to have this opportunity during a natural break in the debate—

Lord Pearson of Rannoch: My Lords, before the noble Lord goes any further, perhaps I may put a question to the noble Lord, Lord Whitty, in regard to his speech.

Lord Evans of Temple Guiting: My Lords, it is too late. The noble Lord should have put his question earlier.

Lord Pearson of Rannoch: My Lords, I shall come back later.

Lord Maclennan of Rogart: My Lords, it is early for me to speak on the affairs of this committee as I have just been appointed to the committee of the noble Lord, Lord Radice. I regard that as a great privilege but it would be inappropriate to pronounce at length on the substance of this extremely important and valuable report.
	The debate, however, allows a short animadversion on the events of the past week, which cast a long shadow. It also affords me the opportunity of expressing great satisfaction in the opportunity to speak in the same debate as the noble Lord, Lord Kerr, whose maiden speech will not have taken those who know him by surprise. His eloquence, his perception and his great good sense assisted the convention, to which I had the privilege of belonging, over many, many months of hard and difficult work. That it was able to achieve as much as it did owes a considerable debt to him for all his work. I can only imagine that he is enormously disappointed by what has happened in the past week, as are all of us who were at the hard rock face.
	Although I do not wish to take a partisan position in this debate, I think it right to point out to the noble Lord, Lord Howell of Guildford, who spoke on the Statement, that the results of the convention's deliberations were not handed down from on high and imposed on anyone. The results were passed to governments; they deliberated upon these proposals and, in some cases, made significant amendments to them. Some members of the convention—I am among them—regretted that we did not have longer to deal with, for example, Parts 3 and 4 of the treaty which proved, in the event, to be considerably controversial elements.
	None the less, it has to be recognised that the constitution attempted to address issues that it is not possible for the European Union to doubt if it is to succeed in delivering policies in areas which former Conservative Prime Ministers indicated they thought it appropriate for the European Union to embrace. The Single European Act was not only about the single market; it actually referred very clearly, as the Prime Minister—Mrs Thatcher, as she then was—was aware, to the aspiration of a common foreign and security policy, as the noble and learned Lord, Lord Howe, reminded us earlier today.
	The treaty of Maastricht, which provided that Europe should seek to create an area of freedom, justice and security, was similarly an aspiration of very great significance. The means of delivery were neglected then and were addressed in the convention. We have to be realistic about the difficulty of concertation of policy. We had aspirations in the 19th century for a concert of Europe, and they came to nothing.

Lord Evans of Temple Guiting: My Lords, I am extremely sorry to interrupt the noble Lord, but he must be aware of the convention that if a noble Lord speaks in the gap it is for a maximum of four minutes. The noble Lord is now in his fifth minute.

Lord Maclennan of Rogart: My Lords, I apologise, but I am bound to say that I sat down when the clock showed four minutes.

Lord Pearson of Rannoch: My Lords, I shall speak extremely briefly in the gap. When the Minister replies to the debate, will he comment on what appears to be a lacuna in your Lordships' report? The European Court of Auditors has, for the past 10 years, failed to give clearance to the EU budget. I should have thought that that was an important item when we are considering the future financing of the European Union. Where is all this money going and how do we stop it becoming so wasteful and corrupt?
	Secondly, when the Minister replies to the debate, no doubt he will want to comment on the very learned and informed contribution of the noble Lord, Lord Whitty. Could I put it to the Minister that all the problems, as far as I could understand, so eloquently exposed by the noble Lord would disappear if the Government were to follow the reasoning of my noble friend Lord Willoughby de Broke and the UK were simply to leave the political construct of the EU, maintaining, of course, our free trade with the single market and all the jobs which support that trade? Surely the government of the day would just gather taxes from the British people and distribute them as they saw fit, no doubt in accordance with the manifesto upon which they had been elected. In those circumstances, there would not be a rebate to argue about, as we are doing today, because we would not have put our money into the clutches of the European Union in the first place.
	In addition, the very finest spur to reform which the common agricultural policy could possibly receive is if the United Kingdom were to leave it. That would be very popular internationally, hugely popular with the developing world and would put a pretty solid bullet into this most difficult of European animals.

Lord Dykes: My Lords, it falls to me also to comment on the maiden speech of the noble Lord, Lord Kerr, and to thank him very much for his wise words. The general feeling—probably universal—was that the quality of his speech was to be expected, particularly by those who know him well from past years. He will undoubtedly make a substantial contribution in this House on European and other matters, and we wish him well.
	In fact, the noble Lord made such an impressive set of suggestions to deal with the modern problems of the budget, as well as some of his comments on the referendum surprises of the past week, that it reminds me of the story of the human cannonball. I hasten to add that I wish him no ill and am talking only in fictional terms. When the circus's human cannonball, a very talented gentleman, was injured—not badly—the ringmaster wrung his hands in grief and said, "It will take us years to find another man of the same calibre". I think that we can say that in respect of the future contributions of the noble Lord, Lord Kerr.
	This has been a trying week for enthusiasts for Europe, among which I most definitely still count myself. Against the background of the dramatic developments in France and Holland, which have been mentioned a lot in this debate, we could be forgiven for easily assuming that the debate on the EU's future financing is just a marginal matter. I am sure that the noble Lord, Lord Radice, would not agree with that, and he would be disappointed if people suggested it. It is, I suppose, a small matter in comparison with the existential questions facing the European Council in June and the UK presidency starting on 1 July about the future, following the result of those two referendums.
	Nothing could be more important than making sure that the future long-term budget formulations of the Union fit in with the requirements of the new enlarged EU, even if, as we know, the size of the annual budget of the community is tiny relative to the national budgets of the member states. Indeed, the gross figure is 2 to 2.5 per cent at most, compared with the 48.5 per cent EU average on public spending share of the total GNP. So it is amazing that the anti-Europeans who consistently go on about a minuscule collective European budget of very modest size, with far too much going on agriculture as most noble Lords have agreed in this debate, never seem to bother too much about the hugely wasteful spending in their own national administrations in whatever member state they live.
	The sixth report of the last Session, published on 9 March, deals with the future of the financial perspectives over the period to 2013. So there is a lot of time in which to think about the period beyond that—which sounds paradoxical but must be true—to make sure that we avoid some of the mistakes that have been made in this particular first financial perspective exercise.
	I congratulate the noble Lord, Lord Radice, and his colleagues on producing a report which has received an impressive amount of consensual support. If people are repeating similar sentiments in this debate, it is none the worse for that.
	The Sapir report has been referred to a number of times. The wife of my noble friend Lord Wallace, who has had to leave for another meeting elsewhere but who wanted to stay for the debate, was a distinguished member of that team. Therefore, we can attribute some of the sensible suggestions in the Sapir report to her and other members, and we thank them for it. The report represented the beginning of a new kind of budget philosophy that is needed for the new Union of the future.
	After all, for some years now, even the keenest advocates of integrated financial programmes have been worried that the old budget construct, with the additions to the Union since the three original countries came together, has led to very distorted patterns of expenditure, notably in farming, but also in other areas which are often not mentioned enough, where the appropriations are smaller. It has obliged the Court of Auditors to refuse certification on a regular basis for all sorts of reasons. These anxieties have secured a resonance from more and more Commission officials and a fairly eager response from many, but not all, national finance ministries.
	It has become clear above all that the October 2002 deal on CAP expenditure was really going beyond the normal limits of proper conduct. It may have looked like that to some of the close observers at the time; it certainly looks like that now to large swathes of the populations of all the member states who happen to follow these very technical and detailed matters. Therefore, the negotiations for the financial perspective period were pre-empted in an unacceptable way. That too shows the problem that we face if either the United Kingdom or other countries individually or working with others think that only their view should prevail on any proposed future structure for the European Union. This is a matter of sovereign member states working together and reaching a genuine and balanced agreement.
	The excessive spending and support of an already hugely overproducing farm output, even in the United Kingdom—we sometimes forget to say that—is at the root of many of these problems and at the root of the disaffection of those who observe the development of the European Union.
	One has to blame the Council of Ministers, however, for bouncing those talks on the future budget size for farming, and not the Commission, which is the normal whipping boy of member governments, who rarely tell their own electorates the real truth of what is happening in the EU. Again, the problem is always compounded. No national minister of any national parliament ever wishes to say what the real problem is and why something should be done. Fisheries have always been a case in point.
	Part of the central problem of getting the public more on side again on Europe is to counter the reality that the decision-making processes of the Commission and the other institutions are too remote and hard to explain, therefore letting national governments off the hook in terms of justifying real policy merits.
	So both for what might be called real reasons and for winning the acceptance of the various publics, we in this part of the House believe that the six main contributors' demand for a 1 per cent ceiling on GNI-measured expenditure is right. The case that is put in the Sapir report and elsewhere is that if one shifts the impetus and the effect of EU budget outlays away from bureaucratic support mechanisms, one will get into growth-inducing or activity-based areas of investment that are aimed specifically at getting higher micro rates of growth, not only in farming—indeed least of all in farming—but in new trades and services. One is thereby helping to lift the overall community rates of growth and implementing Lisbon mark 2 simultaneously.
	Surely this reorientation is now increasingly urgent and helps to ease the pressure on funds that are being wasted by the Commission, which no longer needs to give money to help the older existing member states, possibly with the exception of Portugal and Greece. After all, a relatively small amount of money is required to lift the agriculture and small industries of the new members in totality, since I believe I am right in saying that, with their adhesion, the 10 countries added just under 5 per cent to the total GNP of the EU. Indeed, are we all that far away from the time when the structural and cohesion funds will inevitably be concentrated on the 10 new member states, plus, presumably, Bulgaria and Romania, when and if—perhaps if now, after the shock results of these two referenda—they join in 2007?
	If restraint on budget ceilings is the new leitmotiv, national governments will need also to drop the habit, built up during many years, of asking the Commission to bring in more and more new programmes. The budget for the new security strategy and the WMD programmes is a case in point, because future spending in both those areas could be considerable. I very much support the committee's reminder in paragraph 135 of the report that,
	"no budget items must be sacrosanct, or above scrutiny".
	We in the United Kingdom will be especially interested to see how the new system of farmers and community support works in practice. The new system started during the recent general election, so many members of the non-farming public in Britain have not really caught on to the huge change in policy which one hopes is for the good. Its effects will have to be monitored closely, and, to some extent, everybody is entering uncharted territory.
	Will the Minister respond to the very interesting suggestion in paragraph 136 of the report of the noble Lord, Lord Radice, that we be provided with the Government's proposal for handling the harmonisation of timetables between the Commission, the European Parliament and the duration of each financial perspective—which will presumably be reduced to five years to match the timetables of the other two?
	If the next financial perspective, from 2014, is completed and constructed—after complex negotiations, no doubt—by, let us say, 2010, we could be a felicitous five years away from a root-and-branch modernisation and recasting of the Union's budget. It could by then be principally devoted to outlays on genuine collective programmes on, for example, justice, borders, immigration, security and crime, where transnational work does not diminish the principles of subsidiarity, as well as on tailor-made, focused programmes for the new joiners, achieving for them what was done in Greece, Spain and Portugal when they originally became EEC members. That could be achieved not only through the structural funds in general terms, but also through other specific, closely focused programmes such as the trans-European networks and other instruments.
	It is now becoming clearer to economic advisers where community-wide spending is more rational and where repatriated national spending activity, often to be authorised as a European Union programme anyway, can best be used to eliminate the diseases of excess, waste, inefficiency and sometimes even—although I am sure it is grossly exaggerated in the British press—corruption.
	The other important consideration for economists and politicians is the creation of a modern EU budget system that reflects the very reverse of the system that developed mostly through accidental history and wars in the USA. Whereas, in the latter, the states are usually kept away from counter-cyclical spending to boost the economy, except in localities, and such spending is undertaken only by the US federal budget, in the EU, nationalism is still much more than just alive and well and only the member states really undertake the anti-recessionary, Keynesian spending.
	The EU budget therefore at least retains another virtue of most US states: through different machinery and different history, the receipts it secures more or less equal its outlays. "More or less" sometimes poses interesting problems.
	Nevertheless, I am glad to see that Her Majesty's Government acknowledge that areas such as overall R&D could be enlarged in EU common programme headings beyond the very small current outlays. Apparently, the Government also believe that the Union can play a role in infrastructure investment, provided that it is only pump-priming in certain carefully organised trans-border projects. That sounds a little timid, to say the least. Perhaps the Minister can state it a little more boldly.
	We in this part of the House hope too that the Government will be robust and positive in their views of the future role of the Union in development spending. We on these Benches also welcome the Government's support for the continuation of the own-resources system for a modernised, efficiently administered budget.
	Indeed, if future resources are rationally redirected to the logical priority areas, the UK should be allowed to retain its rebate for the long-term future, alongside a new structure of abatements for any member state which finds itself in unusual and unique circumstances similar to those of the UK. In the case of the UK, gross disparities arose from mechanistic accidents of receipts being at a different level, different import figures and the other parameters of these calculations.
	Effectively, after the referendum shocks—and everybody, even the keenest European, must solemnly respect the decisions made in the referendums in France and Holland—there is an enormous amount of work to be done to rekindle the public enthusiasm for the European Union in many of the long-standing member states. Perhaps they are spoiled by its success—and I do not criticise the public by using that verb, because understandably, with the prosperity that has come from EU membership, it is natural that members of the public take that for granted and then grumble about some of the marginal disutilities of the way in which the EU budget and other systems are constructed.

Lord Willoughby de Broke: My Lords—

Lord Dykes: My Lords, I shall not give way now, for reasons of time. The noble Lord did have a good chance to make his own contribution earlier.
	One way in which the member governments from all parts of the European Union can act—including the new ones, which remain very enthusiastic about joining and wish to see that testified by positive action by the member states—is to produce a modern budget for the 21st century. The UK presidency therefore presents an opportunity, but also a challenge, for Her Majesty's Government.

Lord Willoughby de Broke: My Lords, before the noble Lord, Lord Dykes, sits down, would he say whether he believes that 10 per cent unemployment throughout the European Union is a good financial outcome?

Lord Dykes: My Lords, as a new Member of the House, I have forgotten whether the standing orders oblige me to respond, since I have already indicated that I did not wish to give way to the noble Lord's question. I shall only say, without taking any longer to respond—I have already taken a substantial amount of time—that as you know, there are many arguments about the construction of those figures. Therefore, what the noble Lord is saying is an incorrect assertion.

Lord Howell of Guildford: My Lords, it is a great pleasure to be able to participate in a debate on another absolutely excellent report from the European Union Committee, this time under the wise chairmanship of the noble Lord, Lord Radice, with a very high-powered and experienced committee under his direction. One does not just automatically tick every report from the European Union Committee as excellent. I have known one or two with which I have profoundly disagreed, particularly the one that seemed to misinterpret badly the purpose and future benefits of the now nearly defunct euro constitution. But this one gets the highest praise; it has had it in this debate, and rightly so.
	It is also a very great pleasure to listen to the maiden speech of the noble Lord, Lord Kerr, even though we learned from my noble and learned friend Lord Howe that his speech this afternoon was rather better than some of those that he drafted for my noble and learned friend when he was Foreign Secretary. I am sure that the noble Lord and my noble and learned friend can sort that matter out afterwards. But the noble Lord, Lord Kerr, is enormously experienced, and he rightly expressed the hope that governments—and, indeed, this Government—will learn the right lessons from the past week of drama in Europe. Some of us had the opportunity to comment on that matter earlier, during the debate on the Statement from the Foreign and Commonwealth Secretary that was repeated in this House. I shall not go into the matter now except to express the same hope myself—but along with the fear, as I mentioned earlier, that from the tone of the Statement those lessons have not yet been learned. There is a big step change in understanding what is happening in Europe, and in the whole nature of international relations, which must be grasped before I can have any confidence that lessons are being learned.
	The timing of this debate on the matter of finance is excellent. The issue is of course central, because the new financial perspective decision will shape the budget of the Union. More than just the actual figures, which are in many ways small compared with the vast expenditure of the national governments, as the noble Lord, Lord Kerr, and others pointed out, that decision determines the whole tone and approach of the European institutions to the Europe of which they are proponents and guardians. It is particularly important that we keep an eagle eye on the sums involved and how they are spent—particularly when, as the noble Lord, Lord Pearson, reminded us in his intervention, the Commission has failed to satisfy the Court of Auditors about the European budget expenditure system for the past 10 years. A close eye on those matters is required by national parliaments, and the European Parliament, if the system is to be held efficiently to account.
	As for the rhetoric and the utterances of Ministers, it seems that the opposition party that I represent and the Government are rather close on the rhetoric. All are agreed, and Ministers have made it absolutely clear in the other place, that the initial Commission proposals for the new budget perspective were unacceptable and not a basis for negotiation. This report, with great skill and insight, demonstrates why that is so; it rightly says that the whole approach of the Commission in its first effort is simply too traditional. The Commission is carrying on as though it were for a different kind of Union in a different kind of world from the one that we actually have.
	Not enough emphasis is put on the fact that the Union now has 25 members—and will in due course, we hope quite soon, have 26, 27, 28, or more. In that light, it is the poorer areas of Europe that should receive the most help. If there is a question mark in my voice even as I say that, one has to note in passing that some of the so-called poorer areas in Europe, particularly Poland and some of the Baltic states, as well as the Czech Republic and Hungary, are turning out to be the dynamos of Europe. They are the countries that are growing fastest and attracting huge investment, which otherwise would have gone to western Europe. It is a fine irony that, although those newer member countries—the accession states—have big hills to climb and are starting from a low base, they are now the driving force. They give such life as there is—and it is not very much—to the whole European Union.
	That raises a much deeper question, although it is perhaps not to be debated here, whether the whole philosophy behind the "give them the money" approach to structural funds, although I may be parodying it a bit by calling it that, is the right one to promote growth. Does aid equal development? As we know, the answer in the wider world is, "Not always"; in fact, in many cases, the answer is, "Not often". Those who are thinking about seeing a more balanced and rapidly developed Europe emerge, with some of the really serious poverty in the former eastern and central Europe, should perhaps occasionally question whether the methods, tools and instruments for accelerating development in the poorer areas of Europe are the right ones, or whether they, too, need radical revision, as is suggested for many other areas.
	Leaving behind rhetoric, where we all agree that the proposals are unacceptable and not a basis for negotiation, I come to the question of action. How much is actually happening, and after the new proposals, which have come along as a result of revision and complaint from nation states' governments, has very much changed? The answer is not encouraging, as the changes are not big. The common agricultural policy expenditure is still the vast elephant—the dominant lump—in the budget. The export subsidies are still in place, and they are really a terrible stain on the whole approach of Europe to the wider world and on its claim to be a force for liberalisation of trade and expansion of prosperity.
	Nevertheless, to put the other side of the argument, as the noble Lord, Lord Whitty, rightly reminded us, much has been done. The decoupling of support from pure production in a range of crops and activities is a huge advance. It is right that gradually the world is understanding that what we want from European farmers is good husbandry and not more and more subsidised food—certainly not more subsidised food that crushes imports from the developing world. I join with those who accept what the noble Lord, Lord Whitty, said, in a very interesting speech. There has been progress but, by heavens, there is a very long way to go.
	I turn to the Lisbon strategy or agenda, which features in the report—for which it is a ritual business to call for revitalisation from time to time, as Mr Barroso has done. I plead guilty to some scepticism about the whole approach. The noble Lord, Lord Willoughby de Broke, went enjoyably further in saying that it looked like a children's Father Christmas list. But nevertheless for those who would criticise him, the plain fact has to be faced that the Lisbon agenda mark one and, indeed, mark two, have no results to show at all. The cry was that they would generate growth, create the competitive knowledge economy to catch up with the United States and so on, but none of that has happened. The gap has widened. The central parts of the euro-zone part of the European economy are virtually in a coma. There are enormously high unemployment rates in Germany—almost as high as in the 1930s. Unemployment rates are fearsomely high in France as well. These are not the manifestations or outcomes of some successful strategy; they are the outcomes of the Lisbon agenda strategy. I have to advise those countries that I have recently visited which are seeking to join, including Turkey, that the idea that they should model their whole effort on the Lisbon agenda may lead them to back a loser. Let them join the European Union; that is a good thing. Let them share the values of the wider Europe; that is marvellous. However, there is zero evidence that the Lisbon agenda is some magic button or formula that will produce growth in Europe. In fact, such evidence that there is is completely contrary.
	I should like to say a short word on aid which does not feature very much in the report although there is a reference to development aid. The noble Lord, Lord Lea, mentioned it. I have never fully understood the case for the European Union fifth wheel, as it were—the proposition that the European Union should not only co-ordinate aid programmes with the nation states (that is obviously a sensible thing to do) but that it should have its own additional programmes of a very detailed and extensive kind. The question hangs in the air, do these programmes add value? Successive development Secretaries and successive Commissioners have referred to this. I believe that my noble friend Lord Patten of Barnes has said that the EU system of development aid is bad, bad, bad and does not add value.
	Finally, I turn to the super sensitive question—as everyone described it—of the rebate. The report approaches the matter with great delicacy and efficiency.

Lord Lea of Crondall: My Lords, I am grateful to the noble Lord for giving way. Will he take on board one very small point about development aid? The European Union Select Committee produced a report on that matter a year ago in which it pointed out that in countries from the Balkans through to parts of Africa to have 10 or so different offices in a country trying to do slightly different things with a very small number of professional people at the receiving end was ridiculous. The effort now being made in the EU is starting to pay dividends in the areas of governance, reconstruction, prisons, the judiciary and so on.

Lord Howell of Guildford: My Lords, that is all right so long as that is the co-ordination. I agree that co-ordination is essential, but if we end up with the 10 initial programmes and an eleventh programme—the EU1, an additional wheel on the coach—we are no further forward.
	As I say, the report approaches the rebate issue very sensitively and sensibly. I and my party agree with the Foreign Secretary that the rebate is non-negotiable in an unreformed common agricultural policy—those were the words used by the noble Lord, Lord Radice—in other words, in the present context of unreformed spend. If these things were unwound, if we had repatriation of various policies and if we were considering a completely different budget structure—if we were considering a structure that involved no increase in the net contribution of the United Kingdom, remembering that even now after rebate our contribution is the second largest—and if all those "ifs" were satisfied, one would be looking at a different landscape. However, for the moment, I am sure that the report is right to take the view which the Government take, and which we support, regarding the non-negotiability of the present rebate in the present circumstances.
	I turn to a matter again not covered in the report but which concerns European Union finance; that is, the euro for which the noble Lord, Lord Lea, reproved me for mentioning. I do not know that my views on the euro will shake the currency markets any more than they are being shaken already, but it is at the heart of the mechanisms of finance and financial flows throughout Europe. The deal was supposed to be that the euro would handle the monetary control of the European economy and that the budgetary control would be secured by the stability and growth pact. I remember that I asked Governor Tietmeyer of the Bundesbank, long before the introduction of the euro, how it would all hold together without full political union. He said that it would hold together because the rock on which the entire structure was built was the stability and growth pact. That rock has now crumbled into small fragments. One trembles to think where this is all going. For the sake of financial markets and financial stability I hope that these things can be held together.
	I end with a reflection. Yesterday morning, urged on by my grandchildren, I climbed Vesuvius and stood on the rim of the crater. As your Lordships know, although Vesuvius went up in 79AD, the experts assure us that it will not explode again for at least 1,000 years, if not a million. All I can say is that as I stood there I heard rumbling and quite a lot of steam came out of the crater. When I consider the euro, I hear rumbling and I see a little steam coming out of the crater. Let us hope that the experts, who have been right about Vesuvius so far, will also be right about the euro and the European Union. I very much hope so.

Lord McKenzie of Luton: My Lords, on behalf of the Government I would like to thank the noble Lord, Lord Radice, and the other members of the European Union Sub-Committee A for their report on the future financing of the European Union. The report is a timely and valuable contribution to what is a most important debate—the future direction of the European Communities budget. As the committee notes, the EU is today at a crossroads and it is critical that the budget can meet the challenges of an EU of 25 or more members and adjust to the Union's new priorities.
	Inevitably, this debate has quite properly become entangled with the issue of the constitutional treaty. The referendums' results raised profound questions about the future direction of Europe. Many of these questions of prosperity, of employment, of globalisation and of aid to poorer countries are intrinsically linked to the future financing of the European Union. A number of noble Lords touched upon that this afternoon, particularly my noble friend Lord Whitty and the noble Lord, Lord Dykes.
	It is therefore only right that the committee's report on the Commission's proposals for the future of the budget is debated here in this Chamber. I should like to thank noble Lords who have contributed to the debate today for their insightful and stimulating contributions, which the Government will consider in the ongoing future financing negotiations. I particularly wish to congratulate the noble Lord, Lord Kerr, on his extremely impressive maiden speech. He had a very distinguished career, which included service in Europe and was at the very heart of matters that are before us today, and which I am sure we shall discuss from time to time in the coming months. I look forward to hearing the noble Lord's future contributions. The timing of his maiden speech was spectacularly good. I hope I may suggest that the family motto should be changed from "late but in earnest" to "timely and in earnest".
	On behalf of the Government I should like to respond to the issues that noble Lords have debated today and which the committee raised in its report. These are: the background to the current negotiations; the common agricultural policy; the structural and cohesion funds; the Lisbon agenda; other spending categories; own resources and an EU tax and the abatement and generalised correction mechanism. The noble Lord, Lord Radice, in his introduction gave a full summary of the excellent report from the committee and I hope that I can deal with each of the points that he raised.
	On the background to the current negotiations, like the committee and many of your Lordships today, the Government believe that the next financial perspective is an important opportunity to increase both the effectiveness and transparency of EU expenditure and to consider how allocations within a limited budget can best be refocused in support of the Union's priorities, including enlargement and the Lisbon agenda.
	The Government have therefore proposed that all EC budget spending should be objective-focused, evidence-based, and based on a proper assessment of whether the Union budget is the best instrument for adding value at the EU level. It should also ensure sound financial management and budgetary discipline, and an equitable distribution of spending across the EU, consistent with value-added principles and objectives.
	As a result of that stance, the Government have been at the forefront of calls for further reform to stabilise the budget at no more than 1 per cent of EU GNI or €815 billion at June 2004 values. That is on a commitments basis, and represents a 6.5 per cent real-terms increase compared to the current financial perspective, and is both realistic and affordable.
	The noble Lord, Lord Kerr, made an interesting point about the historical perspective of the scale of the budget. Whatever the areas of discussion, at 1 per cent of GNI or just more than that the figures are a long way from the hallmarks of a superstate, which was suggested by the noble Lord, Lord Campbell of Alloway. That was a telling point.
	My noble friend Lord Lea suggested that the Treasury was being too dogmatic in nailing its colours to the mast at no more than 1 per cent, but I do not agree. It is right to do so. At the current spending levels of the programmes undertaken, that is about where we are. The European Court of Auditors has already commented on the inability of the budget to be met in full in some recent years. There have been significant surpluses on the budget in the past three years, I think. That is why we believe that 1 per cent is right.
	While respecting the Brussels agreement, we will press for a more liberalised and market-focused agricultural sector, including the ongoing reform of the sugar and dairy sectors, and will support further modulation. We want to refocus the structural and cohesion funds on the poorest member states, within an overarching framework agreed by all member states. We want to refocus spending within internal policies on a smaller number of initiatives with demonstrable added value, particularly research and development, and freedom, security and justice. We also want to improve effectiveness of external actions in support of the EU and UK's external objectives, to which the millennium development goals are central, while retaining flexibility to cope with evolving needs and crises.
	Like the committee and many of your Lordships, the Government believe that the Commission has failed to respond adequately to those challenges. In its communications of February and July 2004, the Commission proposed a significant increase in the scale and scope of its policy responsibility, supported by a total EC budget for 2007–13 of more than €1 trillion, a real-terms increase of 34 per cent compared to the current financial perspective. The Government believe that such proposals are unrealistic and unacceptable. Indeed, the European Court of Auditors has been unable to sign the accounts for the tenth year in succession, and believes that it is contradictory for the Commission to try to increase its budget when it does not appear to have the ability to absorb it at current levels.
	The latest presidency proposals amount to a significantly lower overall budget than that proposed by the Commission—around 1.09 per cent of commitments—but one which is still €85 billion too high. There is still no consensus in the Council on own resources. The presidency is still pushing to achieve a political deal on the next EU budget from 2007 to 2013 at the June European Council. We are happy to work towards that, but it is better that we have a deal that involves an overall budget of no more than 1 per cent of EU GNI, significant expenditure reform, and retention of the UK abatement, rather than one that concludes earlier. My noble friend Lord Barnett concurred on that point.
	Although there is a good case in principle for—

Lord Campbell of Alloway: My Lords, perhaps the noble Lord will deal with the question—he may not—that I raised about the ECB and its muddled, inefficient administration as regards the problems with the euro. I do not want to make another speech, but would he be good enough to deal with that? While I am on my feet, I should say that he did not understand what I said about the superstate. I said that the EU constitution treaty proposed something somewhat akin to a superstate, and I dealt with the position of the Berlin visit.

Lord McKenzie of Luton: My Lords, I think that we will have to disagree on that second point. I shall come to the ECB later.
	Alignment between the financial perspectives and the mandates of the European Parliament and Commission was raised by the noble Lords, Lord Inglewood and Lord Dykes. Now is not the right time to do it. The period for the current financial perspective has been agreed to 2013. However, the matter should be reviewed at the time of the next financial perspective. There are obviously benefits to having a longer period, but we see the merit of it being aligned to the period of the Commission and the Parliament.
	As noble Lords are aware, the Government have been and continue to be a leading advocate of reform of the common agricultural policy, pressing for a more liberalised and market-focused agricultural sector. To that end, we secured significant reforms last year, largely breaking the link between tax-funded subsidies and production. Going forward, the Government will continue to push for further reform, including in the sugar regime, and for the transferring of funds from direct subsidy towards targeted environmental measures under pillar two of the CAP, a measure supported by the committee.
	I heard from my noble friend Lord Whitty about some of the background to that. He is obviously playing a key role. The evidence before the committee from, I think, English Nature marked how important a change that was in 2003. Like the committee, the Government view the agricultural agreement of 2002 as a ceiling on expenditure, certainly not as a target. The noble Lord, Lord Howell, acknowledged that progress had been made on that; we are in agreement that there is more to do. We are also of the view that that expenditure ceiling should include expenditure on Bulgaria and Romania when they join.
	Your Lordships have raised interesting issues relating to the future of EU regional policy. Like the committee and many of your Lordships today, the Government believe that in an enlarged EU it is right that the structural and cohesion funds are focused on the poorest member states, where they would have greatest effect, rather than recycled between the richer member states as the Commission has proposed. Richer member states have both the ability and the responsibility to fund their own regional policy within an overarching EU framework that gives member states substantial flexibility to design and implement their own regional policy.
	I am aware that my noble friend Lord Lea was not in total agreement with that. I point out that currently, so far as the UK is concerned, 75 per cent of regional and regeneration funding comes from the national government anyway. The other 25 per cent comes from Europe. It does not seem beyond the wit of government and organisations to get the benefit of best practice across Europe in an overarching framework without those funds having to be recycled in every case via Europe.
	So far as Lisbon is concerned, our aim is a Europe that looks outwards rather than inwards and advances the pace of structural reform to meet the challenges of globalisation. The noble Lord, Lord Howell, said that there had been no results so far, which is a little unfair. The UK aims to work closely with its European partners to achieve that aim during its presidency of the EU. We fully support the Lisbon agenda but, like some speakers today, we believe that it is primarily an issue for member states. There are areas, such as research and development, where spending by the EU can add value to action by member states alone—that is the test—but even there the budget must be consistent with the Commission's ability to manage and distribute such funds.
	Elsewhere, the Government agree with the committee that the principle of subsidiarity should be respected. Again, we have seen in the Commission's proposals significant increases under the heading for expenditure on such competitive matters, but way beyond what we believe the EU is able to absorb over the period.
	Regarding other spending categories, noble Lords have raised important issues about freedom, security and justice. Like the committee, the Government believe that freedom, security and justice are high priorities. However, it is important that all action in those areas respects the principles of EU value added and subsidiarity. To that end, the Government believe that co-operation and co-ordination, common rules and sharing of best practice may be more fruitful than EC spending.
	With respect to external actions, the Government recognise the potential value of external actions spending. However, until improvements are made to the effectiveness and efficiency of EC development spending, especially in the focus on the millennium development goals, the Government do not support increasing EC spending at the expense of more effective bilateral assistance.
	We welcome the committee's support, and that of many noble Lords this afternoon, for the rebate. Noble Lords who spoke in favour of it being non-negotiable within the current context included the noble Lords, Lord Howell, Lord Radice, Lord Kerr and Lord Inglewood. The noble Lord, Lord Lea, referred to the possible benefit of locking into a cash figure, but the rebate, as I understand it, is not a cash figure, but a formula which can vary from year to year, depending upon gross contributions and the moneys that we get back. That is not negotiable.
	Without the abatement, UK contributions since 1995 would have been at least 12 times more than those of countries of comparable size and wealth. Even with the abatement, the UK has paid €58 billion since 1984—two or three times as much as countries of comparable wealth.
	The Commission, however, has proposed radical changes to the financing of the EC budget with its suggestion of a generalised correction mechanism. This would replace the UK abatement and the Government believe that the Commission's proposal is completely unacceptable. It is neither fair nor principled. It would widen, rather than narrow, the disparities between the large net contributors. It would cost the UK €5 billion a year by 2013. The proposed generalised correction mechanism would also institutionalise the failure to redress the iniquities on the expenditure side of the budget.
	In an interesting contribution, the noble Lord, Lord Whitty, spoke about how it all worked with the Treasury, with the refund coming one way and the spend the other, and that, sometimes, there was a net "nil". I should like to reflect on that matter, whereby the rebate is attached to 66 per cent of the excess. Perhaps we can deal with that on another occasion.
	The Commission also proposed that the EU should plan for a new "own resource" from 2013 in the form of an EU tax. The Government and most other member states—a noble Lord suggested that all member states should—firmly reject that. Tax is, and will, remain a matter for individual member states. I am pleased that the noble Lord, Lord Inglewood, supports that.
	The latest presidency proposals suggest that the abatement should be frozen and then phased out. By 2013, that would make the UK the largest net contributor to the EU budget. That would obviously be unacceptable.
	I shall seek to address the questions that I have not yet dealt with. The noble Lord, Lord Campbell of Alloway, raised the issue of the ECB, the removal of the mandate and asked what on earth it was doing regarding interest rate policy. His point about the European economy was interesting, but it is difficult to make a glib recommendation to the ECB, which has a raft of information and data by which to make its judgments. It has recently been pressed to reverse its stated policy on interest rates and we shall have to see, in light of current developments, whether it does that.

Lord Campbell of Alloway: My Lords, will anything be done about the mandate of independence, which has allowed all of this to happen?

Lord McKenzie of Luton: My Lords, not as far as I am aware, but perhaps I may write to the noble Lord on that matter, rather than trying to wing it this afternoon.
	The speech of the noble Lord, Lord Kerr, was interesting and I was intrigued by his proposals on what might be taken forward—and by my noble friend Lord Triesman, in his contribution during the Statement—regarding the legislature meeting in public and whether that would have public support. I imagine that it would. But the ramifications of the treaties and the vote will have to be discussed between member states.
	The noble Lord, Lord Barnett, raised the matter of whether the budget was a "dead duck". I hope that he will forgive me if I disagree with him on that. The budget is at the heart of the debate that we must have about Europe. The Government's line, which was already in place before the results of the referendums, is to the point and addresses the issues that need to be addressed.
	The noble Lord, Lord Willoughby de Broke, raised a number of interesting and challenging issues. A point that emerged from earlier discussions was the need for everyone to discuss what Europe and the Union are about in honest, open and full terms. A contribution that states that we pay £12 billion a year is, at the best, misleading. I am not sure whether the noble Lord is aware that that is the gross payment that we make to the Union. Our net contribution is significantly lower than that. We need to get such matters into context.

Lord Willoughby de Broke: My Lords, of course that is right. It is the gross contribution. But his argument is similar to arguing that it is not the gross contribution and that our taxes are reduced because we get back certain services. The Minister has admitted that the gross contribution that we pay to Brussels is £12 billion a year. If we retained that, we could spend it in the way that we chose ourselves—not with an EU label stuck on it that told us how to spend it. That is my point.

Lord McKenzie of Luton: My Lords, technically, the noble Lord's point is correct—we contribute to Europe, because we are a part of Europe and we obtain direct benefits from it in terms of contributions to us and from being part of the wider union and everything that flows from that.
	The noble Lord said that his contribution was gloat free, although there was much in it that seemed to be gloating. Referring to people who work in the Union as being unemployable elsewhere and "all after their little perks" does not seem to be constructive.
	The noble Lord, Lord Pearson, raised two points. He is right that it has been 10 years since the European Court of Auditors has been able to sign off the accounts, but reforms, including a new accruals accounting system, which is now up and running, and new financial controls, are in place. These run on from what happened in 1999 and were put in place in 2003. We must wait to see the results of that.
	Regarding the broader question of whether we should leave the EU—the Government's answers to that is "clearly not". There are huge benefits to us and to Europe generally from being part of the union. I do not have time to debate them all today—we have done that before and I am sure that we shall return to that issue.
	The noble Lord, Lord Dykes, asked about harmonisation of the budget process. I have dealt with that. Regarding whether we are being timid on infrastructure spending, the right role for the EU, where it can add value and be most effective, is in its pump-priming of investments—investment might come from the private sector or from national budgets—and to get things going, particularly on transnational projects. That is where the thrust of the spending should be.
	The noble Lord, Lord Howell, broadly supported at least the Government's rhetoric, which we appreciate. In terms of spending on aid, we must demonstrate that spending through the EU improves effectiveness and that there is a better focus on the millennium development goals.
	If I have not answered all the questions that have been raised, my colleagues will be happy to follow up in writing. I believe that this has been a constructive and helpful debate. I thank the committee again for its far-reaching and substantive report. I hope that we agree that the future direction of the European Union and the current negotiations are of the utmost importance to the future of the EU and to this country. We believe that the principles that the Government have set down are right for the Union as a whole, right for each of its member states, right for the UK and right for its relationship with the rest of the world.

Lord Radice: My Lords, I thank the noble Lord who spoke on behalf of the Government for his comprehensive reply. He set a fine example as he answered pretty well every question raised, including some rather curious ones. The quality of the debate was high and there have been some fine speeches.
	I thank the noble Lord, Lord Kerr, for his brilliant maiden speech. It was absolutely perfect. He is clearly going to be an extremely valuable Member of this House, as we knew he would be. He is already an extremely valuable member of our committee. Long may he continue in that.
	The noble Lord, Lord Whitty, made a maiden back-bench speech. It was good to hear him and what he had to say about the rebate was fascinating. I was not surprised that the Minister wanted to reflect on what he had to say; I certainly would want to do that.
	Inevitably, the debate has partly been about events in France and the Netherlands. It is absolutely right that it should be because those events raised the question of the nature of the EU. But I disagree with my noble friend Lord Barnett. I do not think that those events make debates about the budget a dead duck. On the contrary, the budget goes to the heart of what an enlarged EU should be about. We are bound to return to the subject during the next few months in our presidency. This debate has been a very helpful beginning to that debate. I thank all noble Lords for their contributions.

On Question, Motion agreed to.

Parliament and the Legislative Process

Lord Holme of Cheltenham: rose to move, That this House takes note of the report of the Select Committee on the Constitution on Parliament and the Legislative Process (14th Report, Session 2003–04, HL Paper 173).

Lord Holme of Cheltenham: My Lords, I am pleased, and perhaps even relieved, that your Lordships finally have the opportunity to have this debate, since it is now nearly eight months since your Lordships' Select Committee on the Constitution, then under the chairmanship of the noble Lord, Lord Norton, published its report, Parliament and the Legislative Process.
	I am also delighted to see the noble Baroness the Leader of the House in her place this evening to reply to the debate, not least because I am well aware of how seriously she takes the issue of how we could legislate better. The committee benefited greatly from her evidence in its deliberations, as we did from the evidence of many Members of the House of Commons and of this House, as well as many distinguished outside experts. It is also a great pleasure to see that we have a "full house" of leaders. That is reassuring because it gives an indication that these matters are not marginal but are central to our success as a legislature.
	But amid all these expressions of pleasure, I sound a slightly captious note. Our report did not receive a response from the Government for six months, and then, the noble Baroness will recall, almost as an afterthought after the election had been called. When she replies, it would be useful to hear how she thinks the response to such reports as this, and therefore the chance for your Lordships to indulge in meaningful debate, could be speeded up.
	I mentioned my predecessor as chairman of the Constitution Committee, the noble Lord, Lord Norton, and I am pleased that, despite what I know is a difficult teaching schedule for him, he is able to be in his place this evening for this short debate. The report owes as much to his skills as chairman and as an active draftsman as it does to his scholarship and his detailed knowledge of our parliamentary institutions. So if I say that he was in a real sense the father of this report, it is not simply the obligatory piety that all chairmen owe to their predecessors. It is a genuine expression of the appreciation of his leadership on this report and this issue that I know is shared by the whole of the committee. I am pleased to see that other members of the committee, past and present, plan to speak this evening as well as other noble Lords with relevant experience and insight.
	Of course, our report, focusing, as it does, on parliamentary scrutiny of legislation, did not come out of a clear blue sky. There have been several signposts over the years that pointed in the same direction. There have been two commissions of the Hansard Society, of which I have the honour to be chairman. The Rippon commission reported in 1993 in Making the Law and the Newton commission reported in 2001 in The Challenge for Parliament: Making Government Accountable. There was also the Conservative Party commission in 2000, chaired by the noble Lord, Lord Norton, which reported in Strengthening Parliament, and the House of Commons Modernisation Committee published its reform programme in 2002. They all well articulated the case for improvement in the way we work, as does the latest Hansard commission, chaired by the noble Lord, Lord Puttnam, which published its report a week ago and made the parallel case for improvements in the way we represent our work to the public.
	It would be ungracious not to acknowledge that some significant progress has been made since 1997. Unhappily, the first manifestation of progress, the so-called "programming" that was introduced with some fanfare as a cross-party approach to the inevitably contentious issue of timetabling, has rapidly become a matter of straightforward partisanship. That was bound to be the case in the absence of the introduction of some form of business committee, which would replace the opacity of the usual channels with more transparency and greater independence from the wishes of the Executive. As the Constitution Committee pointed out three years ago in its devolution report, we now have a working model—an example of a business committee—in the Scottish Parliament. We deserve to hear from the Leaders of both Houses, the noble Baroness and Mr Hoon, what the specific objection is to the introduction of a business committee at Westminster, rather than being given the brisk brush-off at paragraph 40 of the Government's response to our report.
	However, on pre-legislative scrutiny of draft Bills, there has clearly been substantial progress in recent years: between the 1997–98 and 2003–04 Sessions, 42 draft Bills were published. Here I should pay tribute to the leadership of Robin Cook in his spell as Leader of the House in another place who took much of the initiative in this matter. Perhaps this is also because pre-legislative scrutiny, done properly, potentially represents a win-win for Parliament and the Government. As Alex Brazier, senior research fellow of the Hansard Society points out in New Politics, New Parliament? which is to be published this month, it is a win for the Government who get better-tested and considered legislation, and it is a win for Parliament which gets to do the testing and considering, which is the role that we should be playing.
	Significant issues are still outstanding on pre-legislative scrutiny. Phil Woolas, as Deputy Leader of another place, said last year:
	"The Government's view is that a Bill should be published in draft form unless there are good reasons for not doing so".—[Official Report, Commons, 24/2/04; col. 19WH]
	That is excellent. But who decides, and on what grounds? There are no formal guidelines or procedures to indicate what sort of Bills should be subject to pre-legislative scrutiny and whether that should be done by Select Committees, which in many cases are becoming dangerously overburdened with so many so-called core responsibilities, or, as will commend itself to Members in this House, by a Joint Committee of both Houses.
	We specifically recommended in our report that the Government should move from deciding which Bills should be published in draft each Session—publication by exception, as it were—to deciding which Bills should not be published in draft—publication by rule. We also said that where the decision is taken not to publish in draft, the reasons should be given in the Explanatory Notes to the Bill.
	To those eminently reasonable proposals, I am afraid we received a rather dusty and disappointing answer. Despite Mr Woolas's encouraging words last year, the Government's reforming zeal seems to have ebbed, and with it their sights have been lowered. According to their response, we are not talking about all Bills, unless there is a good reason—the Woolas formula; we are not talking about most Bills; we are not even talking about an increasing proportion of Bills; we are simply told in the Government's response that the ambition now is to maintain the proportion of Bills published in draft.
	For a Government who are conspicuously addicted to ambitious targets, that seems to be excessively modest. Can we look for no more progress in this Parliament than simply maintaining the proportion, particularly given the remarks of the Deputy Leader last year?
	Nor did the Government like the idea of having to explain why a Bill might not be published in draft, although I know that Members of both Houses would be extremely receptive to a perfectly reasonable explanation; for example, that it is emergency legislation. I do not see that there would be any problem in explanations from the Government being accepted in a perfectly normal way. However, I suspect that the proposal that the Government should explain why they were not going to publish in draft smacks too much of parliamentary accountability to commend itself to those mysterious characters who seem to leave the darkness of the Government Whips' Office only occasionally for a little light exercise gliding up and down the usual channels.
	I should like to concentrate principally on post-legislative scrutiny. If one were to identify the Achilles' heel of the British system of government, this is where one would find it. We have a decision-making system without a proper feedback mechanism able to learn from experience in such a way as to improve future decisions. The great biologist Jonas Salk pointed out that organisms without feedback are doomed to extinction. In her evidence, the noble Baroness, Lady Amos—if I may couple her with Jonas Salk—also talked of the need to learn by looking back and thereby improving future performance.
	That must be a right analysis, yet in our forward rush as legislators, relatively little time is spent either in Whitehall or in Westminster checking whether the effects of any given Bill were those intended as opposed to the time spent on yet more initiatives. What work is done—I concede that there is some—is, in the words of Peter Riddell, "patchy at best".
	Part of the key to improvement is to ensure absolute clarity of aim in any new Bill. That is important because the prevailing genius of Whitehall, and a method of elevation in the higher ranks of the Civil Service, is that wonderful ability to bridge two positions with a form of words that implies all things to all men. Of course, that is the enemy of good legislation. We want clarity.
	In our deliberations we were tempted by what they have in New Zealand which is a purpose clause in every Bill. In the end, we were persuaded by Sir Geoffrey Bowman that that might have unintended legal consequences, but we were convinced that the introductory section of the Explanatory Notes of every Bill should always contain a clear explanation of the purpose of the Bill, including criteria by which it could be judged subsequently to have met its purpose. That is the basis both for clarity in drafting and political intention and for subsequent review.
	The Government's response to that is not unhelpful. They suggest that they might involve the Law Commission in trying to work out how that should be done—if I understand it rightly—not only in the definition of what should be done but perhaps undertaking some of the work of the post-legislative scrutiny. I would be interested to know from the noble Baroness how that possibility mentioned in the response is proceeding. The Government also leave the door open to a statement of success criteria, which is good news.
	However, the issue of effective post-legislative scrutiny raises serious issues of resources, as both we and the Government have identified. Clearly, there is a role for departmental review within Whitehall; there is a possible role, as I have just mentioned, for the Law Commission; there may be much work that the National Audit Office could undertake; and it may be that departmental Select Committees should commission specialist experts. But the job must be done if we, in this House and another place, are to be wise legislators rather than hyperactive legislators, moving on rapidly to cover up our blunders in a flurry of new activity. For that reason, we recommend that for most Bills post-legislative scrutiny should take place within three years.
	Just now I talked of the risk that Select Committees might become overloaded, but I wonder whether that may not be true of Parliament as a whole. In 1947, LS Amery described Parliament as "an over-worked legislation factory". Since then, the Stakhanovite zeal of successive governments to be judged by their legislative output has become even more frantic. Is it not likely, is it not even probable, that there is a trade off between quality and quantity? If we want to produce legislation that is carefully drafted, clear in its purpose, well discussed with lay and expert public alike, improved by our collective wisdom and rigorously analysed for its subsequent effectiveness, might we not do well to do less but do it better?
	A final word about connection with the public. Research shows that there is a gap between citizens interested in and aware of issues as never before and their Parliament whose work they too often do not understand or even connect with their personal and civic agendas. It is imperative that the public, both expert and lay, are given every opportunity at every stage of scrutiny to be informed, involved and consulted. Good work is now being done both in Parliament and by bodies such as the Hansard Society. New technology can help, but this is just a start. We need to rewire and re-engineer the way in which we work in Parliament so that as well as the Lords and the Commons we recognise that we have a third active partner in legislation, the people themselves. I believe that that is the highway to better laws and a path to better democracy. I beg to move.
	Moved, That this House takes note of the report of the Select Committee on the Constitution on Parliament and the Legislative Process (14th Report, Session 2003–04, HL Paper 173).—(Lord Holme of Cheltenham.)

Lord Carter: My Lords, I welcome this excellent report which is full of practical and well founded recommendations. Since publication of the report, we have seen in their manifesto the Government's proposals to appoint a Joint Select Committee. I shall quote from that as it will help the House as it relates to the work of the committee:
	"Following a review conducted by a committee of both Houses, we will seek agreement on codifying the key conventions of the Lords, and developing alternative forms of scrutiny that complement rather than replicate those of the Commons; the review should also explore how the upper chamber might offer a better route for public engagement in scrutiny and policy-making. We will legislate to place reasonable limits on the time Bills spend in the second chamber—no longer than 60 sitting days for most Bills".
	There was also the report of the Labour Peers' group so ably chaired by my noble friend Lord Hunt of Kings Heath on the reform of the powers, procedures and conventions of the House of Lords. The House held a full debate on that report last Session. If we take all that together, there is clearly much to take into account when considering Parliament and the legislative process.
	The report is based on the three areas of parliamentary process—pre-legislative scrutiny, the passage of legislation and post-legislative scrutiny. There is much to be said for the proposal in the report that the great majority of Bills should be published in draft. How best to examine draft Bills and to make proposals for their improvement should be carefully considered.
	There will be a real time and resource problem if every draft Bill is to be subjected to formal consideration, with evidence taken and so on through either a departmental Select Committee in the Commons or a Joint Select Committee of both Houses.
	The resource problem is not just one of staffing, there is also the problem of finding the number of MPs and Peers to provide the membership of the parliamentary committees which would be set up to take evidence and report. I am sure that the Government approach of dealing with the matter on a case by case basis is the right one.
	Having chaired two Joint Select Committees on the draft Mental Capacity Bill and the draft Disability Discrimination Bill and sat on a third, the draft Mental Health Bill, I am a great believer in the formal process of pre-legislative scrutiny. That can be provided only for a limited number of Bills.
	In my view the right approach would be to publish as many Bills as possible in draft. A number of those would be considered by departmental committees in the Commons and a smaller number by Joint Select Committees of both Houses. The remainder should be subject to wide consultation to be based on written submissions, with the Government's response published with their proposals for amending the draft Bills as a result of the consultation.
	Getting the maximum number of Bills published in draft in the first place is the main hurdle. Appropriate scrutiny can then be decided, as I have said, on a case by case basis.
	A general point regarding timing should be borne in mind when considering both pre-legislative scrutiny and the passage of Bills, which is generally overlooked. Now that four-year Parliaments and spring elections seem to be becoming the norm, the life of each Parliament is now divided into one long 18-month Session, two normal Sessions of 12 months and a short pre-election Session where electoral considerations rather overtake the considerations of the smooth passage of business. I am putting that as politely as I can.
	If we turn to the actual passage of legislation, I would propose one major change; namely, that the carry-over of Bills should become more or less automatic. I can see nodding from the other side of the House from a former leader of the Commons, the noble Lord, Lord Norton of Louth. There is mention in the report of a rolling programme of legislation and there have been proposals to abandon Sessions altogether and to have each Parliament as one long Session.
	In my view the existing Session structure should remain, with the majority of Bills still being announced at the beginning of each Session. But, as Bills become ready for introduction as the Session progresses they should be introduced and then carried over to the next Session. A further refinement would be to give each Bill its own life of either the 14 months which is mentioned in the report or the 12 months suggested by the Hunt committee. However, I believe that that would require amendments to the Parliament Act.
	Such a process would automatically smooth the progress of legislation and reduce but not completely avoid the present log-jam at the end of each Session. I should point out that the Opposition would not lose its power to press for changes as each Bill reaches the appointed time for completion, either the 14 or 12 months. In fact, the Opposition will be able to negotiate from a position of strength on every Bill and not just those which are piled up at the end of the Session.
	There is the further advantage of giving the Commons something to do in their fallow period between, say, the end of June and the end of the Session. Bills could be introduced in the Commons in the summer. They could be carried over and would then come to the Lords in the next Session.
	It would be relevant at this point to say something about the Government's proposal of a limit on each Bill of 60 sitting days in the Lords. That is of course not a new proposal. The 1968 White Paper on Lords reform in paragraph 53 stated:
	"The House of Lords would have a period of 60 parliamentary days in which to consider a Bill".
	That White Paper was approved in this House on a vote.
	There has been some misunderstanding about the actual effect of a 60-day limit. A big Bill that requires eight days in committee would require a total of 14 sitting days—one for Second Reading, eight for Committee, four for Report and one for Third Reading. The great majority of Bills would require less time. Of course a 60-day limit would prevent the Government exercising undue delay in taking the stages of a Bill—the Hunting Bill springs to mind.
	There is, however, the problem of defining a sitting day. The number of days for legislation in the Lords is constrained by having the weekly debate day, which is now on a Thursday. Only three days per week are available to the Government for legislation in the Chamber between State Opening and the end of June. Also the sitting days in the Chamber are of about six and a half to seven hours duration, less if there is a Statement. In Grand Committee the sitting day is only four hours, from 3.30 pm to 7.30 pm. In a normal Session of 140 to 150 sitting days, the number of days actually available for legislation in the Lords is fewer than the total number of days.
	I cannot help feeling that rather than trying to set a limit by legislation, it would be better to establish a limit by agreement as a convention of the House, in rather the same way as the intervals between the stages of a Bill are now a convention; they are generally observed but they can be changed by agreement. The Companion might say that,
	"normally Bills should not exceed 60 sitting days whilst in the Lords".
	I hate to be critical, but the wording in the manifesto states:
	"We will legislate to place reasonable limits on the time Bills spend in the second chamber—no longer than 60 sitting days for most Bills".
	Quite how you define "most" legislation, I am not sure.
	I suggest one other change to our procedures in considering legislation. I made this suggestion in my evidence to the Constitution Committee. In my view, for virtually all Bills the Committee stage, whether on the Floor of the House or in Grand Committee off the Floor, should be conducted by Grand Committee rules, that is, without votes. In my experience, it is much easier to secure changes by the Government to a Bill if the Committee stage is a genuine process of scrutiny and discussion of possible changes, rather than an artificial battle between a Minister whose brief says "resist" to every amendment and an Opposition who have to pretend that they might vote on everything. The House works much better in Committee in collegial rather than in adversarial mode. The battles of principle—and there will be some of course—should be decided by votes on Report.
	I referred at the beginning of my speech to the Government's proposal for a Joint Committee of both Houses to examine the powers and conventions of the House. Such a committee would no doubt wish to examine the operation of the Parliament Act. The Act certainly needs some technical changes to improve its clarity. Two Bills were nearly lost inadvertently through different interpretations of the Parliament Act. The Planning Bill was accidentally killed in the Commons and had to be revived through the good offices of the Opposition by a special, and probably unique, Motion in the Lords—illustrating, incidentally, the flexibility of our procedures compared with those in the Commons.
	Also the authorities in the two Houses took differing views during the final stages of the Hunting Bill about the precise effect of the Parliament Act. There really is a need for clarity in the interpretation of the Act.
	Mention of the Parliament Act brings me to what might be called the new McNally doctrine regarding the Salisbury/Addison convention, on which it appears that the noble Lord, Lord McNally, seems to have declared UDI. The noble Lord, Lord McNally, and I both contributed chapters to a recent publication, Parliament in the 21st Century. The noble Lord, Lord McNally, in his chapter said:
	"I do not want to see a Second Chamber which would challenge the pre-eminence of the Commons".
	Perhaps when the noble Lord, Lord McNally, winds up he will be good enough to reconcile that statement with his newly declared position on the Salisbury/Addison convention.
	The noble Lord, Lord Strathclyde, is winding up for the Opposition. That would be a very good opportunity for him to state the official Conservative Opposition view of the Salisbury/Addison convention. The noble Lord may remember that he wrote to me before the 1997 election confirming that if Labour were to form the Government the Conservative Opposition would observe the Salisbury convention. Has that position changed?
	There is, of course, a fundamental difference between the Conservatives and the Liberal Democrats so far as concerns the Salisbury convention. I believe that the Conservatives have it firmly in mind to form a government as soon as the opportunity arises and would be powerfully aware of the dangers of creating a precedent that would affect them when in government. This is not a possibility that unduly troubles the Liberal Democrats.
	To conclude, I quoted at the beginning of my speech from the Government's manifesto commitment to set up a Joint Committee of both Houses to consider the relationship between the two Houses and related matters. I cannot do better than to conclude by quoting from my own chapter in Parliament in the 21st Century. I should point out that my chapter was drafted 18 months ago, long before the Labour Party manifesto was being considered. I said:
	"Whatever the eventual reformed composition of the Lords, whether appointed, elected, or a mixture of the two, the powers, procedures and conventions of the Lords will have to be re-examined . . . There has to be a balance between the right of the Lords to revise and scrutinise legislation and, indeed, delay it, and the right of the elected Government to obtain its programme of legislation.
	A settlement between the political parties in the two chambers in setting out the agreed modalities of the legislative process will have to be reached. To codify such a settlement completely in legislation is possible but this would be an inflexible solution, although some revision of the Parliament Act may be necessary. It would be better to reach agreement on a concordat setting out the relative powers of the two chambers of Parliament and the conventions which should govern the proper conduct of the Lords. Without such an agreement and understanding the House of Lords will have the considerable power of a House where the government of the day is always in the minority without the responsibility or accountability of an elected House where the majority party forms the Government. It should not be beyond the power of responsible parliamentarians to find a solution which firmly establishes the scrutinising, revising and eventual delaying powers of the Lords while allowing the elected government to obtain its programme of legislation".

Lord Wakeham: My Lords, this is not the first time that I have followed the noble Lord, Lord Carter, in a debate of this sort, and I guess that it may well not be the last time, either here or in some other forum. As he spent the greater part of his ministerial career seeking to get government business through, and so have I, it is not surprising that we agree on quite a number of issues. However, we do not necessarily agree on all the issues. There were one or two things in his speech that worried me somewhat. One thing that I take from it which I think is very important is that, in whatever we do in this Chamber, to lose the flexibility that has been the hallmark of how we have managed to get over a whole range of difficulties in the past would be a serious mistake.
	I congratulate the Select Committee on its most excellent report. If we move in the direction it recommends, real progress will have been made.
	Reading the exchanges in the evidence, as well as the conclusions, it was clear that the committee had a considerable amount of experience and expertise. Indeed, from somewhere in the evidence I recall a response to one question where the Minister made the point that the questioner had more experience in these matters than did the Minister. All that was true. The answers that Ministers gave in many cases seemed to me the sort of answers that I might have given when I was in their position. Officials would be mortified if Ministers did not remind the committee of some of the very practical difficulties that any government would see in some of the committee's proposals.
	In my view the committee will not get everything it wants, but in my judgement the committee was right in most of its recommendations. If, as a result, it gets some significant improvements in the way legislation is scrutinised, so much to the good.
	As the noble Lord, Lord Carter, said, effective scrutiny is not just about the form and shape of the methods of scrutiny. It is about a real desire and ability of Members of this House or of another place wanting to give up the time, not just in scrutinising the Bills, but in the considerable amount of work and study necessary to be able to make a real impact.
	I fear that the pressures and changes in the House of Commons have over recent years tended to mean that they look much more at the high-profile issues and less at the grinding detail that is necessary if we are going to get legislation right. Of course, the House of Lords has an enviable reputation in its work in the Select Committees and is in an ideal position to make a major contribution in any improvement in any pre- and post-legislative scrutiny.
	One of the great advantages of the House of Lords is that among its Members are a whole lot of noble Lords who are not primarily politicians, who often have great experience and expertise away from this House. They can bring a greater insight on issues than others who have spent a lifetime in politics.
	Perhaps I may refer for a sentence or two to a theme on which I touched in the debate on the gracious Speech. I am not sure that we in this House use that expertise in the most effective way. One only has to talk to some Members of this House—industrialists, professors, eminent people—who have made it clear that they find some of our procedures arcane and too formal to make the best use of their expertise. More pre-legislative and post-legislative scrutiny would use their talents much more effectively.
	All the helpful proposals depend on there not being great changes in the composition of this House, or at least not too quickly. It is important to form a view on what this House should be doing before we go down the road of changing its composition too drastically. Frankly, a bunch of second-rate politicians who cannot get into the House of Commons or the regional parliaments or assemblies are not going to make effective members of a revising Chamber.
	Thirdly, the House will not get at once all the blueprint or procedural changes that the committee recommends, but it has to seize the opportunity to make what progress it can. In my view, it might be a draft Bill, a White Paper or even a party manifesto, which should give the appropriate Select Committee a chance to throw some well-informed non-partisan light on a particular subject. In some ways the ideal would be for a report of a non-partisan House of Lords Select Committee before any detailed proceedings began in either House, but that may not be too practical, at least at the moment.
	Perhaps I may give an example of practical progress. I have the honour to be the chairman of the House of Lords Economic Affairs Select Committee. For the past two years, and, we hope, again this year, we have formed a sub-committee to look at aspects of the Finance Bill while it is still in the Commons. We have published our report before Report stage in the Commons and what we have had to say has frequently been the subject of discussions in the debates in the House of Commons.
	We are very careful: we take only a few clauses and we look at them in detail. We never express a view on the rates of tax or on the incidence of tax, but we take extensive evidence from tax practitioners, lawyers and officials from the Treasury, Inland Revenue and Customs and Excise. We concern ourselves with the need for the changes, the levels of consultation, the practicalities and administrative details and their likely effectiveness. It has proved a very worthwhile exercise, giving all parties involved a chance to explain the issues and the problems as they affect them. Not least was the excellent way in which officials from the Inland Revenue and the Customs and Excise were able to tell us in detail why they thought the changes were necessary. In all cases—I think that that is right—the officials proved to be effective and extremely well informed witnesses. They shone considerable light on the legislation that Parliament was passing.
	I again congratulate the committee on a most effective report. I expect that the committee will get some progress, and that we will progress. But, as the noble Lord said, quoting a journalist, it will be "patchy" and may happen in unexpected ways; none the less, I am sure that there will be progress.

Baroness Gould of Potternewton: My Lords, like the noble Lord, Lord Holme, I congratulate the noble Lord, Lord Norton, as chairman of the Select Committee. His expertise was invaluable in steering us through the production of this important report.
	In its introduction the report states:
	"If Parliament gets it wrong, the impact on citizens can on occasion be disasterous; and history has shown examples of legislation that have proven clearly unfit for the purpose".
	That principle should guide all our deliberations. The Select Committee was right to concentrate in detail on one aspect of the legislative process: primary legislation.
	Over the years, many reports and analyses have been written on this topic—referred to by the noble Lord, Lord Holme, as signposts. Unfortunately, a number of those have started from the negative premise that the process is in decline. Although that provides headlines for the media, it does little else. The debate benefits far more from the approach of the Norton commission, which acknowledged that things were getting better but that further improvements were needed.
	The Select Committee report picks up that theme against the background that Parliament cannot act in a vacuum. Parliamentarians are not the fount of all wisdom; listening to informed opinion is a crucial part of the process at all stages, starting with consultation on the policy behind the issue. As well as hearing from organisations with a vested interest in the subject, ways must be found to do the more difficult job of engaging individuals.
	In her evidence to the committee, the example highlighted by my noble friend Lady Amos of the consultation process used for the Green Paper Every Child Matters shows how a little imagination can overcome that problem. Two consultations were prepared: one for adults and one especially for children, 14 to 19 year-olds. Nine ministerial and 60 other events took place around the country and youngsters were able to talk directly to the Minister in a web chat. That resulted in more than 4,000 responses from youngsters, twice the number received from adults.
	If the Government are serious about such consultation—I genuinely believe that they are—there must be consideration of the best way to get the maximum response and in particular what new technology should be used. The principle of consultation, although in a different context, is highlighted by the Puttnam commission, set up by the Hansard Society, on the communication of parliamentary democracy. It says that, for Parliament to re-engage with the public, it can no longer be seen as a place that involves people only once every four or five years at the ballot box. We must continue to look at other ways of connecting with the public.
	Pre-legislative scrutiny of draft Bills provides another such opportunity for the Government to hear the public's views. The committee and all who gave evidence welcomed its increasing use. Although I appreciate that, for a number of reasons, it is not possible to have scrutiny of all Bills, the report is right that wherever possible it should be an established and integral part of legislation, as in the Scottish Parliament.
	Like the noble Lord, Lord Holme, I believe that when pre-legislative scrutiny is not possible, an explanation should be provided. Therefore, I do not wholly accept the Government's response on that point. If, as the response says, an explanation for the non-production of a draft Bill can be given by Answer to a Written Question or oral Question, why can it not be included in the Explanatory Notes to the Bill? It would save everyone time and eliminate speculation about why it has not happened.
	The value of scrutiny on the principle of a Bill cannot be over-emphasised. I have just participated in a scrutiny committee for the first time. We were able to examine in depth the principle behind the legislation and to bridge a gap in order to achieve that principle. As a result of that experience, I look forward to participating in the Bill as it goes through the House.
	Interestingly, Robin Cook commented in his evidence to the Select Committee that Commons scrutiny committees are made up of very different people from those who form the Standing Committee. I am not sure whether he was aware that that does not apply in this House. The knowledge learned from being on a scrutiny committee is seen to be used effectively in the later examination of the Bill.
	Where I have a minor disagreement with the Select Committee report is that it identifies the use of joint pre-legislative committees only for big and complex Bills. My view is that it should be the normal procedure whenever possible. There is great value in Members of both Houses pooling their experiences. I do not believe, as my noble friend Lord Carter does, that Members cannot be found to sit on these committees. I am certain that Members could be found if they were approached.
	Witnesses made other suggestions, which were highlighted in the report, about how to further involve the public in different stages of the Bill, such as further evidence being taken by special Standing Committees, Standing Committees in the Commons or Grand Committees in the Lords. My reservation is that that would increase the time taken to get the legislation on to the statute book, but it is right that at some stage every Bill should be subject to detailed examination by a committee empowered to take evidence.
	As the report says, carry-over is the answer for Bills that require more time to ensure effective scrutiny. As has been evidenced in practice, it should not be necessary for there to have been pre-legislative scrutiny for a Bill to be carried over. Although it appears that there is general support for carry-over—I agree with my noble friend Lord Carter on this occasion—it is little used. There seems to be a reluctance to break out of the existing sessional mentality.
	It is encouraging that the Government recognised in their response that there are some benefits to a rolling legislative programme. But they qualify that by saying that the sessional cut-off is currently an integral part of our programme. I cannot envisage annual Sessions as we know them being eliminated very quickly, but I would be grateful if my noble friend could elaborate further on whether she envisages a time when a two-year rolling programme is the norm.
	I started by referring to the impact of legislation on citizens, but the only way of discovering the impact is by monitoring the effect of the legislation. We hear when problems become apparent, such as in the much-quoted Child Support Act 1990, but we rarely hear when legislation has worked well and achieved its objective.
	The noble Lord, Lord Holme, said that the Government had asked the Law Commission how post-legislative scrutiny could be achieved, what the options were and who should take the responsibility. When is the Law Commission expected to report and how will implementation follow?
	There is clear disagreement between the Government and the committee on the thorny question of a business committee. The Select Committee discovered that it was a major development in the devolved legislatures. A corporate body takes responsibility for considering the business of the House. In all instances the committees met regularly, once or twice a week, to discuss forthcoming business and arrange the timetable. Such a committee would not replace the usual channels but would ensure a more inclusive process. I genuinely believe that there would be greater advantage in making the process more transparent and removing the mystique.
	The case has been made by a number of the commissions and has received cross-party support. I can do no more than quote the evidence given by my noble friend Lord Carter to the committee about his experience as Chief Whip in the House—I apologise for not giving him warning. He said:
	"In the planning of the session, the draft bills and all the rest of it, that could equally well be done by a business committee because, in a sense, it is not adversarial; it is not political; it is just the programme of work".
	On the basis of that evidence, I hope that the Government will further consider, and not just reject, the introduction of a business committee.
	In conclusion I refer to the many reviews produced on the process of legislation. It reminds me of when I was responsible for the organisation of the Labour Party and the many reports written on how to improve that organisation, resulting in slow and marginal change. To speed the process up, I did what some people would never have believed possible: I established a review of reviews. Everybody sat down and went through all the words—no witnesses, no evidence, just the words that had been printed. We put together all those proposals, and, from that, we were able to make substantial change.
	I am not suggesting a similar exercise now, although it might be a good thing. Nor am I suggesting that progress has not been made: it has. However, as the Select Committee says, more needs to be done. I therefore hope that the proposals before us will be implemented and will be the basis of improving our process of legislation, as review after review has urged us to do.

Lord MacGregor of Pulham Market: My Lords, as one who has just left the committee, I would like to say how much I enjoyed my time on it and how valuable I found the work that it did and to say to my noble friend Lord Norton of Louth and the noble Lord, Lord Holme of Cheltenham, what a pleasure it was to serve under their chairmanship.
	After rereading the report over the Recess and coming to it afresh after an interval of eight months, I felt that a compelling case had been made for the main recommendations. That is a real tribute to my noble friend Lord Norton of Louth, who did much of the drafting and gave the report its shape. I was also struck by the general direction of the evidence that we received from people from all parties with real experience in both Houses. All their evidence pointed in the same direction and was in favour of the recommendations that we put forward.
	I speak as someone who was a Back-Bencher in the other place for some years and a Minister for 15 years. I am now coming back to what I used to do 25 or 30 years ago, which is to serve on Committee stages in the Lords. Like the noble Lord, Lord Holme of Cheltenham, I acknowledge the progress that has already been made, particularly the number of draft Bills going for pre-legislative scrutiny; it would be churlish not to do so. However, we need to go further.
	I shall speak first about the argument for most Bills having pre-legislative scrutiny. The obvious first point, which many people have made, is that the process is not working particularly well at the moment. That is partly because there is too much legislation—both the number of Bills and their size—and partly because of other pressures on MPs. They are not able to give as much time as one would like to pre-legislative scrutiny. That situation has not been helped by the changes in working hours in the other place in the past few years.
	There are also the processes at Committee and Report stages. All of us who have been through the process know exactly what happens: there is concentration on the major issues of political difference or on the issues that will attract most media attention. There is less concentration on the details and the technical points, so that so much goes undebated. In this House there is less partisanship and greater technical expertise, and so the House can give more attention to the less high-profile but nevertheless crucial parts of Bills, which simply go unlooked at in the other place.
	I was struck by what my noble friend Lord Wakeham said. He and I have much experience of finance Bills. I have long thought that the criticisms that I was making of the way in which issues are examined in the other place applied particularly to finance Bills. All the big, high-profile issues are dealt with, but the mass of technical clauses that there are in every finance Bill are practically undebated. I pay tribute to the work that his committee does. It could be taken further. As my noble friend Lord Wakeham rightly said, it is an argument for the present composition of the House of Lords, given its role and responsibilities and the increasing role in legislative scrutiny that this House will have.
	Timetabling—programme orders and so on—has not worked, as the noble Lord, Lord Holme of Cheltenham, pointed out. I was struck by the evidence that Alan Beith gave us:
	"there has been a tendency to use up the time"—
	in programme orders; guillotining, if you like—
	"on one or two early groups of amendments, leaving other amendments, including substantial government amendments and new clauses, to be passed formally without any discussion or examination at all. This has increased the dependence on the Lords' ability to scrutinise bills without limit of time".
	In other words, timetabling has, in a sense, made it more important for the Lords to do the work that is not undertaken in the Commons. In the 2002–03 Session, 23 Bills were subject to programming orders, yet 75 per cent of those Bills included parts that were not considered in the other place. Clearly, timetabling is not working effectively.
	Then, there is the point to which the noble Lord, Lord Carter, referred—it has always worried me, and it worried me when I was Leader of the House of Commons: the constraints imposed by the single Session, which mean that there is a huge rush of legislation—Second Readings and so on—in the early part of the Session. Often, if you do not get everything done by Christmas, you are in real trouble later on. Then, there is the enormous rush at the end, in the October spillover, when we are dealing with masses of amendments going between here and the other place. I have sometimes thought that allowing 200 amendments to go back in a week to the other place, where they are not examined, is a disgrace to parliamentary procedure.
	There is a more positive point about pre-legislative scrutiny. When I first joined the other place, I was keen on the development of Select Committees—at that stage, we had very few; now, of course, we have all the departmental Select Committees. One reason was the expertise that individual MPs were able to build up through serving on a departmental Select Committee. It was a much better way than anything else that was going on in the other place. To some extent, the same applies to pre-legislative scrutiny. With the heavy emphasis on professional politicians who have had no outside career during most of their life in the other place, it becomes more and more essential to get that expertise at House of Commons Committee stage.
	I am a passionate supporter of the first-past-the-post system and of the direct constituency link. However, the constituency does not provide an MP with the expertise needed to consider legislation. The present way in which outside experience is brought to bear is haphazard and second-hand. It depends on whether individual members of a committee are prepared to go and listen to outside organisations. They do not have the depth of knowledge that would enable them to come back when the point that they are making is criticised. That is where the pre-legislative process, in which outside evidence is given directly to the members, is so important. It brings in a new dimension and enables individual issues to be considered more thoroughly.
	For all those reasons, I felt, like the noble Lord, Lord Holme of Cheltenham, that the Government's response to our recommendations on pre-legislative scrutiny was disappointing. They said that they would seek at least to maintain the proportion of Bills published in draft; that is a long way from where we wanted to end up. I also felt that the reasons given for not publishing a Bill in draft were very weak. I will not bother to read out the whole paragraph, but it did not seem to add up to a row of beans. Above all, they missed the key point: having to put most Bills into pre-legislative scrutiny is a discipline. Of course, there will be occasions on which one will not wish to do it—both Houses would understand that—but it is that discipline that is missing from the Government's response.
	Why the resistance? There is the pressure to get Bills through. We can judge that by the number and scale of the Bills and the feeling that governments are judged on how much legislation they achieve. There is sometimes a belief among civil servants that, having carried out the consultative processes and applied their expertise, they have got the Bill right, and there is a general disposition not to alter it. All former Ministers will remember seeing in large print at the top of briefing on individual amendments the word "Resist".
	Douglas Hogg from the other place put it extremely well in his evidence to us. He said that many junior Ministers—indeed, Cabinet Ministers—could not have the detailed knowledge of each part of the legislation to be able to probe deeply. Therefore, there is a tendency either to accept the advice, if one does not have the detailed knowledge, or to refuse to give way to the amendment because doing so would be regarded as a sign of weakness. However good the civil servants—many are extremely good—they are not the repository of all wisdom. I was interested to see that Peter Riddell had spoken to some civil servants who had acknowledged that the pre-legislative scrutiny arrangements improved a Bill. As I said, Douglas Hogg put the point extremely well. He said that a junior Minister listening to the pre-legislative scrutiny process would be able to turn to his civil servants and say, "You may say that this is the case, but, laddie"—as he put it—"you don't know anything like as much about the issue as the experts who have just been putting their evidence to us". All of that is valuable in the pre-legislative scrutiny process. It not only enables Parliament to fulfil its proper role in looking at legislation and enables MPs to make judgments based on hearing both sides of the case, but it also leads to better legislation.
	I am very flexible on committees and how that should be done. In the report, we have put forward a number of options. Here, I agree with the noble Lord, Lord Carter: I do not think that the work could always be done by departmental Select Committees. With six Home Office Bills it would be impossible for the Select Committee to do the work. But that it should be done, I am very clear on that.
	I want to say a special word about special standing committees and, in this House, special public Bills committees. Our report notes that neither House makes much use of such committees, which is a pity. I had an experience of a special standing committee. The first Bill that I took through the House of Commons was the deep sea mining Bill. It was highly technical and I have to admit that I did not have much knowledge about it.
	In the special standing committee, for about three or four legislative Sessions, all of the companies and experts involved came before us putting their points of view and being probed by the committee, including the Minister. The benefit was that not only did it remove what might have been wasted time or bipartisan approaches, but it also led to a very much greater knowledge by those on the committee of outside views.
	I know that the Rippon commission, the Norton commission and the Parliamentary First publication, Parliament's Last Chance, have all recommended more use of those committees. I was interested to learn that Robin Cook felt that this should be a normal process for most committees. Sir Michael Wheeler-Booth and other former Clerks, equally, felt that that was valuable. It would be helpful to have that used more where there was not pre-legislative scrutiny. That is why we put forward recommendations 15 and 16, to which the Government's response again was not as I might have wished it to be.
	Of course, pre-legislative scrutiny of draft Bills and special standing committees will increase the pressure on MPs, although I suspect not so much on departments which will be doing the work anyway. It may ease the parliamentary draftsman's role and load. But nothing is more important than that we produce better legislation. Therefore, MPs ought to spend more time on that.
	One of the problems is that work in committees is not a glamorous role. It gets very little attention in the media or in one's constituency, and so on, but it is a very good breeding ground for ministerial appointments—the ladder to ministerial office. It is important that we establish that really good work in those committees leads to promotion.
	As regards carry over, I was struck by how in their evidence two former Leaders of the House of Commons and the former Government Chief Whip in the House of Lords, the noble Lord, Lord Carter, strongly recommended much more use of carry over. I was a member of the committee, so I was unable to make my view known. Perhaps I may now say that it is three former Leaders of the Commons who are strongly in favour of that. I have always thought that we often end up with botched legislation because of the need for haste in the dog days of June and July and the two weeks in October. Sometimes, as I said earlier, it leads to what I regard as a disgraceful situation.
	I was interested in what the noble Lord, Lord Carter, said about sanctions for the Opposition. He is probably right. His way of looking at things would enhance the position of the Opposition, but it would certainly lead to better legislation.
	Finally, as regards post-legislative scrutiny, about which the noble Lord, Lord Holme, talked, I am not prescriptive as to how and when that should be done, but as a general principle it is highly desirable. It is also important to get the objectives and check-list of legislation in the Explanatory Notes so that there is a check-list later in order to see how well it has worked out in practice.
	That point was well put by Mrs Corston, chairman of the Joint Committee on Human Rights, when she said in her evidence,
	"Our responsibility does not begin with a Bill's introduction to Parliament or end with the royal assent. Improving the efficiency with which we process legislation is only a small part of improving our effectiveness".
	I know that that will lead to pressure on resources, but we have tried to frame our recommendations to reduce that pressure as much as possible. We are all arguing now for regulatory impact assessments for statutory instruments and post-regulatory impact assessments. I believe that it should apply to legislation. Ministers and officials will know that later they will be held to account and that would better concentrate their minds.
	I am grateful for all of the support that there has been for this report. I certainly endorse all of the recommendations and I hope that we can proceed more in those directions.

Lord Smith of Clifton: My Lords, although I am now a member of the Select Committee on the constitution, I was not during its deliberations that led to this report.
	On the principle of heirs and assigns bearing a continuing responsibility for the work of their predecessors, I am happy to offer support for the proposals that have been made. I, too, should like to add my thanks for the contributions made by the previous members. I should also like to remark on the outstanding role of the committee's first chairman—the scholarly and noble Lord, Lord Norton of Louth. This is the last of a long line of reports which have emanated under his chairmanship. That the committee is now a well established feature of your Lordships' House owes much to him. It is not always a good idea to have an expert on a committee's subject in the chairman's role—indeed, it is generally unwise—but the noble Lord, Lord Norton, has proved to be the exception to the rule.
	In this report, the noble Lord possessed not just the necessary expertise but he has also had the luck: he has caught the right tide. The report is being debated in a newly emerging context in which, it seems reasonable to predict, parliaments might just be regaining their place in the political sun after, in the UK at least, nearly a century in the shade.
	Contemporary politics is now in a very dynamic mode, and not just in the UK. That manifests itself in a number of ways. Most recently it is to be seen in the rejection of the proposed EU constitution in France and Holland. The fact that the opposition to the constitution was an unnatural alliance of political enemies and disparate pressure groups is not the point, which is the extent of popular disaffection with the stance and style of the political elites that the referenda results demonstrated.
	Similar manifestations can be deduced in this country. I referred to some of the new trends and tendencies in the British electorate in the debate on the outcome of the general election that the noble Lord, Lord Lipsey, introduced on 26 May, just before the Whitsun Recess. I shall not repeat what I said then. That debate highlighted the general and growing concern, resulting from widespread and increasing public alienation from the political process, which is deeply worrying. The problem has been further examined by the recent Hansard Society's report, chaired by the noble Lord, Lord Puttnam, on the communication of the work of Parliament to the outside world, which has made some useful, technical suggestions.
	Even the new Leader of the other place felt moved to address the problem in his first public utterance in that post. Last week, he wrote in the Guardian that he believed that the best way to reconnect the governors with the governed was for the media to show greater respect for MPs and that those who advocate a fairer voting system and other reforms were missing the point. In Mr Hoon's view, respect for Parliament is what really matters.
	Of course, it is precisely that sort of ministerial attitude that nurtures popular disdain for politics and politicians, as was very evident in the French referendum. Mr Hoon got the riposte that I think he merited in the Independent editorial last Saturday, which pointed to his record with regard to parliamentary questioning when he was Defence Secretary. Be that as it may, the significant point is that he felt obliged to comment on current public attitudes towards politics and politicians, even if his analysis was, to some extent, self-serving and slight in the extreme.
	The report makes a number of reasonable proposals for improving the work of this House. Rather like the Puttnam report, it deals with practical matters and comes up with recommendations for the better ordering of business. None of them is particularly contentious. They are sensible and should not provoke objections. Of the 28 recommendations contained in the report, according to my calculations, the Government in their response accepted eight, disagreed with seven and were either half-hearted or non-committal in the case of 13. The language of the response, as invariably employed by the Civil Service drafters, does not make for ease of analysis. Indeed, it is meant to prevent it.
	But what is clear is that the Government and their officials regard the modernisation of the procedures of this House as being of low priority and not something to be encouraged. Such an attitude, however lamentable, might be expected in the traditional departments of state—and we should not be fooled by the rapidity of changes of title in the fashion of renaming leaking nuclear power stations—but it is deplorable in a new Ministry in the form of the Department for Constitutional Affairs. The DCA is second only to Mr Geoff Hoon in its lack of comprehension of the present parlous state of affairs regarding the unravelled constitution of the UK and the related public disaffection with politics.
	On a specific point, the prolonged duration of direct rule in Northern Ireland needs to be addressed. A business committee of the kind suggested in the report may well have helped in this regard. As noble Lords know, Northern Ireland legislation invariably comes in the form of orders and statutory instruments. These are virtually impossible to amend. This, along with the shortage of time, makes parliamentary scrutiny of Northern Ireland affairs very perfunctory. I ask the Lord President of the Council, as I have before, how Her Majesty's Government intend to remedy this very unsatisfactory state of affairs.
	However, despite the foot-dragging on the part of the Government in many respects, as I said in my opening remarks, things may be looking up. I noted the first utterance of the newly elected MP, Mr Ed Balls. As a poacher turned gamekeeper, as it were, he has expressed the view that values and their assertion should be reintroduced into political discourse. I heartily agree. It would be the best way to re-engage the governors with the governed. I hope, probably in vain, that he sticks to his views when—and this may well be likely quite soon—he returns to poaching in the form of a Minister.
	In the mean time, waiting for an injection of ideas and values in place of the turgid, technocratic managerialism that has fuelled public alienation for far too long, the recommendations of this report and others such as that of the noble Lord, Lord Puttnam, together with an authentic debate about a fairer voting system and other related reforms, are all constituents of a broad spectrum of remedies that will help aid the resuscitation of British parliamentary democracy.

Lord Norton of Louth: My Lords, it is a pleasure to follow the noble and scholarly Lord, Lord Smith of Clifton, for the second time in as many sitting days. I very much welcome the debate and I congratulate the noble Lord, Lord Holme of Cheltenham, on the clear and effective way in which he has introduced it, and I am most grateful to him and other noble Lords for their kind comments. I now know how one of my students feels towards the end of a seminar when he says, "But everything I want to say has already been said". I am afraid that that will not necessarily make my speech any shorter.
	I begin by reinforcing a point made by the noble Baroness, Lady Gould. It is difficult to exaggerate the importance of this debate. Parliament approves the rules that shape how we behave. Acts of Parliament stipulate what we cannot do. They empower and constrain public authorities. They impose regulatory regimes on private as well as public bodies. It is essential therefore that Acts of Parliament are fit for purpose. Legislative scrutiny is at the heart of what Parliament does. Ensuring that the law is both necessary and well crafted is crucial to the well-being of the polity. This debate is not about some technical matter, suitable only for parliamentary experts; it is about the very way in which the rules that govern us are debated and approved. The future well-being of our political system rests on getting the process right. As things stand, and what underpins the report, is that we are not getting it right. Parliament's involvement in the legislative process is essentially too narrow, too pressured, and too closed.
	For Parliament, the traditional starting point of the legislative process is when a Bill is formally introduced for First Reading. The end point for both Parliament and government is when a Bill receives Royal Assent. Within that narrow frame, an increasing volume of legislation is being processed. The sessional cut-off and Ministers' keenness to pass legislation, especially their own reputation-making big Bills, have generated what Robin Cook characterised as the "tidal wave" approach to legislation. A mass of Bills is introduced at the beginning of a Session. They then cascade down to Standing Committees at roughly the same time before flooding along the Corridor to your Lordships' House, a point well made by my noble friend Lord MacGregor. The volume of legislation expands as the resources available to Parliament to deal with it remain, at best, restricted. Parliament cannot keep pace with the increasingly pressured process. Neither can those outside the House.
	The demands on Parliament in such a short space of time mean that there is limited opportunity for those outside the House with an interest in a measure to be consulted. Well-resourced firms and lobbying organisations can keep pace, but others cannot. The process may not be entirely closed, but it is not as open as it should and could be. The public are in large measure left out of the process, a point so ably observed by the noble Baroness, Lady Gould.
	The committee's report addresses these problems and seeks to achieve a fundamental culture shift, moving to a longer and more open process. It sees the legislative process not simply as the period from the introduction of a Bill to Royal Assent, but rather as encompassing pre-legislative input and post-legislative effect. It envisages a process that is not only extended, but also more open, enabling those outside Parliament to have an input during a Bill's passage.
	I do not wish to repeat what is in the report since noble Lords have had a chance to read it, and the noble Lord, Lord Holme, earlier provided a clear overview. What I wish to focus on is the Government's response and to put some questions to the Leader of House. In so doing, I shall reinforce a number of questions already posed by noble Lords.
	The Government's response constitutes something of a curate's egg. I shall comment on the bad bits before I come to the good bits. However, I want to draw attention initially not so much to the content of the egg, but rather to how long it took the Government to lay it.
	As has already been mentioned, the Government's report was published on 29 October last year. Their response was published on 20 April, only just coming in within the six-month limit. The delay, coupled with the content of the response, confirms that there is still an attitude on the part of government that fails to engage fully with the important and necessary role of Parliament. Parliament is viewed primarily, if not exclusively, through the prism of government self-interest.
	The issue of the time set for responding to committee reports is an important one to which we will need to return on another occasion. For the moment, let me just ask the Leader of the House to confirm that, if this report had been published not by the Constitution Committee of this House, but by the Constitutional Affairs Committee of the other place, the Government would have had to publish their response within two months. Can she tell us why it took the Government six months to produce a response—basically as long as it took the committee to conduct the inquiry and produce its report—and in what way the response would have been different had it been produced within two months?
	I turn to the content of the government response. It reads as if written by someone who is initially sceptical, but at the end sees the light and warms to the recommendations. On pre-legislative and legislative scrutiny, the Government recognise that some of the recommendations are matters for both Houses rather than for Ministers. Where it does affect government, there is little that marks a significant move forward. If anything, they are being nudged forward and, in one instance to which a number of noble Lords have already referred, appear to take a step back.
	Previously, as cited in the report and as already mentioned by the noble Lord, Lord Holme, the Government in the form of the then Deputy Leader of the other place, Phil Woolas, have stated that,
	"a bill should be published in draft form unless there are good reasons for not doing so",
	as well as declaring that,
	"it is the Government's intention and policy to increase the amount of legislation that is subject to pre-legislative scrutiny".
	However, paragraph 11 of the government response states:
	"The Government continues to be committed to pre-legislative scrutiny. Whilst it will not be possible nor necessarily desirable to sustain the year-on-year increase for an indefinite period, we will seek at least to maintain the proportion of bills published in draft".
	That is an ambiguous statement as well as a contestable one in terms of its normative content. Given the very positive developments that have taken place in pre-legislative scrutiny, which the committee has warmly welcomed, could the noble Baroness explain why there appears to be this move away from the position previously taken? What exactly is the justification for apparently disavowing Mr Woolas's statement that Bills should be published in draft unless there are very good reasons not to?
	On the issue of a business committee—I can keep my comments short because the points have already been made by the noble Lord, Lord Holme of Cheltenham, and by the noble Baroness, Lady Gould—the Government essentially ignore all the evidence offered in the report. It states in paragraph 40:
	"The Government does not believe it would offer significant advantage over current arrangements".
	Given the evidence amassed in the committee's report, perhaps the noble Baroness can tell the House why the Government hold to that belief. No reason is provided in the response.
	On the recommendation that Bills should normally stand referred to an evidence-taking committee after second reading, three reasons are offered for rejecting it. The first is that some Bills have already been widely consulted on. This is a point already taken on board in the committee's report. The second is that for some Bills there is no time. This is true in some circumstances, in which case the House can vote to de-refer them. The third is that some Bills are essentially partisan measures. This is the argument normally trotted out and one which was dealt with by the Rippon commission. In fact, very few Bills can be deemed "partisan" Bills if one employs the criterion analogous to that employed for the certification of money Bills. Given that, perhaps the noble Baroness can provide the House with reasons—which are not already taken into account in the committee's report—as to why Bills should not normally be referred to evidence-taking committees.
	I might add that, far from being overly ambitious in its recommendation, the committee may have been too modest. After I spoke recently to the Statute Law Society on the committee's report and the Government's response, some tax lawyers approached me to ask why the committee's report excluded Finance Bills from the recommendation. In their view, it is quite feasible for Finance Bills to be considered by an evidence-taking committee, a point reinforced by the speech in this debate of my noble friend Lord Wakeham in reference to the work of the Economic Affairs Select Committee of your Lordships' House.
	Employing evidence-taking committees has the potential to improve the quality of Bills, not least through enabling those outside the House to have a say on them. It is important that government recognise that their Bills are likely to benefit from such scrutiny. Adopting a defensive position reflects a lack of confidence. A government confident in their own measures should welcome parliamentary scrutiny.
	I turn to the good part of the egg. The Government express a willingness to consider ways in which the criteria by which a Bill may be deemed to have fulfilled its purpose can be made known. They do not consider the Explanatory Notes to be the appropriate place but they will consider ways in which it may be possible to provide a statement of the criteria.
	Why this positive element? The reason is that it forms part of the Government's approach to post-legislative scrutiny. This is the very welcome feature of the Government's response. The Government, at both paragraphs 31 and 47, accept the case for more post-legislative scrutiny. They state in paragraph 31 that,
	"the Government believes that strengthening post-legislative scrutiny further could help to ensure that the Government's aims are delivered in practice and that the considerable resources devoted to legislation are committed to good effect".
	They have therefore given close consideration to how post-legislative scrutiny can best be achieved and have asked the Law Commission to undertake a study of the options and to identify, in each case, who would most appropriately take on the role. They recognise that the commission itself may have a role to play in such scrutiny.
	This is a notable move forward. I reiterate the question asked by the noble Lord, Lord Holme of Cheltenham: perhaps the noble Baroness can expand on what will now happen? In particular, can she tell the House when the Law Commission has been asked to report by? It is important that we move forward as expeditiously as possible.
	In moving forward, it is essential that we do not rely solely on the Government. Parliament has a role to play independent of government. The committee's report is addressed as much to Parliament as to government. We will move forward only if there is the political will in Parliament to do so. It is a point that I have been making for the past 25 years. Political will is fundamental to achieving effective parliamentary reform.
	To conclude, on the issue of post-legislative scrutiny the Government appear willing to move forward in a way that they appear unwilling to do in respect of the other stages. This failure to be more positive on the recommendations for pre-legislative and legislative scrutiny are disappointing—and, in part, irritating—but if one is not to have the whole package then some movement in respect of post-legislative scrutiny is welcome and, in some respects, is potentially the most important.
	The implementation stage of legislation constitutes a parliamentary black hole. By addressing it, by moving forward in a way similar to that in respect of pre-legislative scrutiny, there is the potential to develop a new and significant role for Parliament, ensuring that it plays a role at all stages of the legislative process. That, for the reasons developed in the report, has the potential to enhance the quality of legislation in this country. That would be a massive step forward.
	It is still not the ideal—there is a long, long way to go—but if the report of the Constitution Committee has moved us closer towards improving the quality of legislation, then it will have made a notable contribution, one that will affect everyone in this country.

Lord Dahrendorf: My Lords, this is an important debate on an important report. Both the report and now the debate owe a very great deal to the noble Lord, Lord Norton of Louth. I am honoured and pleased to follow him in the debate.
	It is 13 years since the Rippon report was submitted. It made an important difference to the legislative process, some traces of which are still with us. Since then, as the noble Lord, Lord Holme, in his impressive and thoughtful introduction told us, a number of reports have been published by public and private bodies. It is to be hoped that what I might call the "Norton/Holme" report will follow the Rippon report in making a difference to the legislative process. It is also entirely appropriate that we should have this debate in your Lordships' House.
	Perhaps I may make an observation here—which not all of your Lordships will like—based on my membership of this House over now more than 12 years. Parliament has a number of functions, three of which stand out. The first function concerns the accountability of government, both in the sense of supporting government, if that is what one wishes to do, and in the sense of holding government to account from a critical and opposition perspective. The second function is to provide a link between the political centre and the electorate—the citizens, the constituencies. The third function concerns legislation.
	These three tasks are more than any one Chamber seems able to satisfy. In most continental countries, what has been dropped by Parliament is the contact with the electorate, with constituencies. In some continental countries, even the accountability of government is virtually invisible.
	In my experience over the years, while the other place—the House of Commons—is comparatively strong in the accountability field and in its connection to the constituencies, it has to some extent neglected, or had to neglect, the legislative process. I am simply taking up what the noble Lord, Lord MacGregor, said earlier. The result, which was not written into the constitutional history of the country, is that your Lordships' House has become in one of its functions—just one—the legislative Chamber of Parliament. That is an interesting development; one would not have found it in any textbook, but in my view it has worked, and is working, surprisingly well.
	We can do this in your Lordships' House in part because, as a non-elected Chamber, we have no obligation to spend time on constituency weeks and on maintaining contact with citizens. However, saying that we have no obligation is not to say that we leave out of consideration what people think. Indeed, I am often surprised at how extremely well informed, in a non-partisan way, your Lordships are about the views of those for whom we ultimately work—the citizens of this country.
	Having said that and thereby underlining the importance of this report, I should like to make two brief observations. I make them because their tone, at any rate, is slightly different from the apparently prevailing sentiment of the House. They are about pre-legislative and post-legislative scrutiny.
	Pre-legislative scrutiny is an interesting invention. All of us, or almost all of us, welcomed it when it was first introduced, but questions can be raised about it. We are not the United States Congress. In other words, we are not a Parliament in which legislation is created and where the Government are not in a position to create legislation. It could therefore be argued that one must make sure that the responsibility, at least for government-sponsored legislation, remains with government. One can at least raise the question of the limits of the usefulness of pre-legislative scrutiny in a parliamentary system of the kind in this country. I also observe in passing that one of the results of pre-legislative scrutiny seems to be that Bills get longer, sometimes much longer. This may be a good thing; it may lead to good legislation, or it may not.
	Above all, I have to emphasise from my experience as chairman of the Delegated Powers and Regulatory Reform Committee that it puts that committee in a slightly difficult position. The committee initially welcomed pre-legislative scrutiny in its report in 2000 and called it,
	"a valuable part of our work"
	to have to comment at an early stage.
	Since then, for those who have read our reports carefully, and that of course includes all of your Lordships, it will not have gone undetected that the tone of our comments on pre-legislative scrutiny has changed somewhat. We find it difficult to scrutinise something that is essentially a moving target. Your Lordships will therefore find in our recent comments to pre-legislative scrutiny committees—whose reports are published not by us but by them—sentences such as:
	"We would like to make some observations in respect of those areas which the Committee would look at especially carefully were a Bill as eventually introduced to be in the form of the draft".
	In other words, certain kinds of scrutiny are not possible at the pre-legislative stage. It remains necessary, however long and detailed the pre-legislative stage is, to undertake the scrutiny with all the seriousness to which your Lordships and the committees of this House are accustomed.
	My second comment is on the post-legislative situation. I note with interest that, at one point at least, the Constitution Committee report mentions sunset clauses. In this regard, I am not speaking as chairman of the Delegated Powers and Regulatory Reform Select Committee, although I know that some of the members of the committee share my view. In many, many cases, we should give much more serious consideration to the possibility, feasibility and usefulness of sunset clauses or, at any rate, of procedures which move in the direction of sunset clauses; that is, reviews in set periods and at particular times. That is by far the most effective way of deregulating and reducing the continuing burden of regulation.
	Those who gave evidence to the Constitution Committee—I believe that only one person gave evidence in support of sunset clauses—made an important point, certainly so far as secondary legislation is concerned. My personal preference would be for every piece of secondary legislation to contain a sunset clause or, at any rate, a severe review clause. In quite a few cases, it would be useful for primary legislation as well. It would offer our scrutiny process an additional weapon, as it were, to that of negative and affirmative resolution. Perhaps it could be employed to serve the people for whom we work; that is, the citizens of the country. I hope that in due course the House will find the time to give serious consideration to this issue. Perhaps the Constitution Committee will find the time to have a look at this instrument for controlling legislation and making sure that it serves people in the best possible way.

Lord Elton: My Lords, I thank my noble friend Lord Norton of Louth for the effective methods and agreeable style of his chairmanship and I assure him that, in his successor, his committee is still in very capable hands.
	I had not intended to talk about the media environment in which the legislative process takes place, but the report of the Hansard Society has been mentioned, particularly by the noble Lord, Lord Smith of Clifton, and it is worth just drawing attention to the fifth chapter and what I regard as a wrong analysis. On page 72, the report correctly states that government has adapted to the modern media world much more readily than Parliament—that is perfectly true—but it goes on to state that there is no conspiracy of silence in Parliament, rather an institutional failure of communication that needs to be addressed in a constructive way. That is actually the position from which many of your Lordships start, but it is not quite as simple as that. The Government have actively changed the media circumstances as a result of having adapted so much more readily to them than Parliament. They have done so by adopting a habit which was regarded as regrettable, but which was practised to some extent by those who preceded them in office; that is, the making of all, or almost all, policy announcements outside Parliament to the media, so that the media get the reaction of the rest of the media to the policy, and the Government's own reaction to the media, and nobody sees the reaction even of the Government's own Back-Benchers to the new policy, let alone that of those of the Opposition. That has taken the cameras, most of the time, out of the Commons and the country is the poorer therefore.
	But that is not what I wanted to speak about. Had the debate been held almost immediately after we reported, as one would have hoped, I might not have needed to speak at all, but time has moved on and I feel that I must. In this House, we are hesitant to comment on the doings in another place. We are less so than we were, but we have been hesitant. Therefore, it was refreshing to hear in evidence a memorandum from a former Member of the other place, George Cunningham, who was a Member for 17 years. He made the trenchant comment that:
	"Parliament unquestionably is able to affect the content of Bills. The dominant characteristic of the British parliament is that its Members, or at least its Commons Members, too often decline to do so".
	He goes on to discuss the reasons for that. One reason, no doubt, is sheer volume—but let us just see what the result is in this Chamber. The extradition Bill is coming to this House, and my noble friend Lady Anelay has pointed out that 25 per cent of its clauses have not been discussed in the House of Commons at all. Last year, the Pensions Bill arrived with 60 brand new clauses and the Prevention of Terrorism Bill had more than 100 clauses which had not been discussed in another place.
	The noble Lord, Lord Dahrendorf, in his speech, put the matter into a new perspective for me. It was an important and extremely interesting suggestion that this House has become the primary legislative Chamber, and that the other House is getting on with the other two jobs that Parliament has to do. Perhaps, in reflecting on that, I shall change from my present discontent at what is going on. But it is necessary to consider that situation with great suspicion because, of course, the other House is not particularly content with us having the last word on legislation. There is the makings of conflict there.
	If all the recommendations of the Hansard Society, in its recent report on connecting parliament, chaired by the noble Lord, Lord Puttnam, were in place, one wonders whether the public, realising that 75 per cent of the legislative work set before their elected and salaried representatives was actually being done by the unelected and unsalaried upper House, would be very happy with that situation—or whether in fact the situation would last for more than five minutes. I rather suspect not, and am therefore a Puttnamite in that regard.
	The volume of legislation is frequently referred to. Rather than trying to stimulate your Lordships to further horror on that score, I recommend the speeches made in the two last debates on the humble Address at the two most recent openings of Parliament by the noble Lord, Lord Phillips of Sudbury. He put the matter with extreme force. I shall leave it at that. But as an ex-Home Office Minister, I am aghast at the fact that what I regard as my old ministry should have produced 57 Bills in the last seven years and still not got it right. What is the point of the process if that is what it produces?
	In toto, I understand that we now add more than 10,000 pages of new law to the statute book every year. Who is going to read or understand them? Those who benefit are the lawyers, who have to read and understand them and do so for a very large fee—and occasionally form up and say that they are not paid enough for managing the cases that arise from that legislation. There must be something wrong in that. I am aware of the pressure on new Ministers and Secretaries of State to generate legislation. Northern Ireland is a microcosm of all this; I was a Minister for Education in Northern Ireland and was put under instant pressure to secure slots in the legislative programme for my department. That happened as soon as I had arrived there, before I had been a Minister for even 24 hours. There is a momentum towards legislation in our Civil Service and political structures, which needs to be addressed and diminished.
	The second aspect of the matter is even more worrying, and that is the way in which we manage our business—or rather the way in which it is managed in another place. That is neatly summarised—very conveniently, almost on the next page of the evidence volume—by Sir Michael Davies, who said:
	"While the amount of legislation continues to grow, there are also pressures to shorten the time for which Parliament sits. Changes in both Houses in recent years have been aimed at making the hours less unsocial and the number of sitting days fewer. Inevitably, this means that there is less time for scrutiny of Bills. The problem is worse in the Commons where the Government controls the time of the House. The Government does not have that control in the Lords".
	The control of time flows from the composition of the House of Commons. I remind your Lordships that Parliament was invented to control the government. When it was invented and for 300 years thereafter the government were outside and Parliament was inside, and it was quite clear what the distinction was. I am repeating what I said in the Queen's Speech but two sentences will not go amiss.
	In the reign of George I with his majesty not speaking English it was necessary to have an English speaker in charge of his business as Prime Minister. He was inside Parliament and he has been followed by a flood. Now we have a House of Commons that has been invaded by the Government. More than 70 Members—not counting parliamentary private secretaries—of the organisation that the House of Commons was invented to control are now Members of the House of Commons. That gives them control of the time. The time is crucial to the management of business.
	That brings me to a disagreement with the noble Lord, Lord Carter, for whom I have the greatest respect, regarding the desirability of having a 60-day limitation on a Bill in the House of Lords. My quibble is not with the 60 days but with the principle of a limitation of any sort. That is the beginning of the control of time. Those in favour of the measure say that it is a generous, perfectly good amount of time and that if you need more, you can ask for it. However, anyone setting a snare for a rabbit makes the snare bigger than the rabbit's head and anyone tickling a trout has the fingers wider than the trout ready to grab it when they get up to the gills. Once the principle is established that there is a convention that a Bill must be out of the House in a limited time, the limitation of time in this House has begun. That is the thin end of the wedge which we should reject. We should reject it because it can then be extended so that we have a more rigid control exerted by a successor.
	However, what makes this matter even more sensitive in my view is that it appears to be connected with the idea of having a Joint Select Committee of both Houses to establish what are, and should be, the conventions of this House. Your Lordships will know how to treat the recommendations when they come here, but they are to be recommendations made by a mixture of your Lordships and Members of another place. Hitherto for our part we have always been very reluctant to comment on procedures in another place. However, if the other place tells us that we should have time limits on our business it will be beyond us to restrain ourselves from saying in public what we think about the management of the business in the other place—which the public will say for us if the recommendations of the noble Lord, Lord Puttnam, are put in force, which I hope they are.

Lord McNally: My Lords, I begin by quoting paragraph 221 of the report which states that,
	"quantity should not be confused with quality".
	I should have thought that the greatest restraint shown this evening was the fact that no noble Lord mentioned that the most recent Queen's Speech constituted the largest and most prolonged raspberry to that recommendation that we have had in recent years. The Queen's Speech contained 40 or so Bills and 15 draft Bills and constituted a massive overload of the system long after the report was put forward for consideration by government. The Government's actions with regard to introducing that amount of legislation show the direction in which they are going.
	The debate has recognised to a certain extent only the real conflict in this matter, to which the noble Lord, Lord Elton, referred in the closing part of his speech; that is, that a large number of the people involved in improving the parliamentary process have a completely different vested interest, which is the rapid progress of government business. I was talking to a very senior civil servant recently who said to me very frankly, "What the Prime Minister really wants is a five-lane highway down which he can drive his legislation as speedily as possible". I said, "If you do not mind, I want the House of Lords to remain as a few speed bumps on that highway".
	We need to understand that conflict; that the noble Baroness has a double duty, and that there are those on the Government Benches who see facilitating government business as a major objective. We are going to have to deal with that as discussions unfold. We all know the language of our political system: "The Government must govern"; "The main duty of the Opposition is to oppose"; "The lady's not for turning"; "I have no reverse gear". That is hardly the language of the committee or of the bringing together of ideas that is behind a lot of the report. We have a confrontational and adversarial system, which over the years has believed that the clash of battle and a little inflexibility and unreasonableness test the quality of both Ministers and legislation. Many of us think that there might be a better way. I agree with the noble Lord, Lord Wakeham, that in this House the better use of committees and the expertise available to them could be a good way forward.
	I sat on a pre-legislative committee, the Puttnam committee on broadcasting, and on the freedom of information committee. The Puttnam committee was by far the better and most effective because it was a Joint Committee. The two freedom of information committees sat in parallel at either end of the Corridor, wasting a great deal of time and not having as much of an impact on the outcome of the legislation as did the Joint Committee. I make this point about pre-legislative scrutiny to the noble Lord, Lord Dahrendorf. For many years I made my living in public affairs, advising companies on how to affect Parliament; lobbying. I have never had any great difficulty with that. A Parliament without lobbyists is a Parliament without power. Pre-legislative scrutiny opened up the system so that it was not the man in Whitehall who knew best, and so we were able to get information and ideas at a pre-legislative stage. That is a far healthier way of doing it, rather than trying to nobble civil servants at what used to be called the "soft pencil" stage of legislation. Opening up influence like that and having ideas tested makes for better legislation.
	We are always going to be up against the macho politics; the hard men in government who are not going to have any of this nonsense. The fact is—as has been pointed out by a number of noble Lords—that it has produced ill-considered, poor legislation. I am sorry to disagree again with the noble Lord, Lord Dahrendorf—it is not because he has moved his place in the House—but he has been over-generous in saying that it somehow makes this place more powerful. We do not catch all the bad legislation that comes forward, given the sheer volume of ill-considered legislation. Then there is that other great wheeze of government, the several hundred amendments tabled late in a Bill's progress—all of those need to be checked in the process.
	Like my noble friend Lord Smith, I see this as a type of Rubik's cube that includes the reform of the voting system, how we behave, the system in this House and how we communicate. What depresses me is learning that this Government will solve that Rubik's cube by a combination of Mr Hoon and Mr Prescott—two names that, separately or together, do not generate excitement in radical breasts.
	I am attracted to the idea of post-legislative scrutiny, not least due to a department that has been mentioned a number of times as a chief cause of over-legislation—the Home Office. There is a need for a check on the ratchet effect of Home Office legislation as it affects civil liberties and human rights. Sunset clauses and post-legislative scrutiny could be of great benefit. Even during my decade in this House, I have seen whole chunks of Home Office Bills resisted, while the next emergency powers Bill, rushed through in 48 hours, miraculously contained the same clauses that this House threw out a few months or years before. There is a real need for Parliament to take another look at the way that government takes some of their powers over time.
	The noble Lord, Lord Carter, challenged me regarding my views on the Salisbury convention, while he extolled the views of the Labour Back-Bench committee on reform and the contents of the Labour manifesto. I am very open-minded about reforms of conventions and procedures in this House. There can be genuine discussions relating to that. But I shall not go along with cherry-picking a procedure that would give the Prime Minister his five-lane highway. Regarding the Salisbury convention, it is extraordinary that this House was given a range of powers less than six years ago by a Labour government, by a democratically-elected other place. Now to resurrect a 60 year-old convention that was offered by a Conservative-dominated hereditary House to a Labour government with 48 per cent of the vote, and then to say that that should still apply to a Labour Party that is now the largest party in this House, but is a government with 36 per cent of the vote, is stretching the limits of the convention.
	I shall spell this matter out to the noble Lord, Lord Carter, and to others. If the Government wish to clip the wings of the House of Lords—and there are many hints to that effect—without making such actions part of a wider reform that would place other checks and balances on the power of the Executive, I shall use every power at my disposal, irrespective of the Salisbury convention, to preserve those checks and balances. That is a proper approach and the continual plea to the Salisbury convention is the last refuge of legislative scoundrels.

Lord Carter: My Lords, my point was about a remark that the noble Lord made in the chapter that he contributed to the report, to which we both contributed. It was that he had no wish to challenge the primacy of the Commons. How can he reconcile that?

Lord McNally: My Lords, it is reconcilable. I cannot challenge the supremacy of the Commons because the Parliament Act is in place. But I will use every power at my disposal if a House of Commons, with a government elected on 36 per cent of the vote, tries to ram through restrictions on the power of this House, which is, in many ways, the last defence, the last check and balance on the Executive. I urge the Government not to go that way, but to seek broader agreement on these matters, and not to start wheeling out a convention that is tainted because of when it was made and the present realties.
	I shall not go on. I was going to mention the Puttnam report, which I think might justify a debate in its own right. Perhaps one of the parties can find an opportunity for that. I thank the committee for such a stimulating debate and I shall finish with what the noble Lord, Lord Norton, pointed out: political will is the key to this.
	"The fault . . . is not in our stars,
	But in ourselves".
	Parliament and parliamentarians have to hold on to power to check and balance the Executive. That is what we are here to do, and that is what we will continue to do.

Lord Strathclyde: My Lords, the noble Lord, Lord Dahrendorf, said that this was an important debate, and so it has been. I should like to join noble Lords in congratulating the noble Lord, Lord Holme of Cheltenham, on securing, at last, this debate, my noble friend Lord Norton of Louth, on chairing the committee in the past, and the other members of the Constitution Committee on producing an extremely valuable report. It is not just valuable: it has been useful and interesting. One has only to look at the political weight of the contributors: my noble friends Lord Wakeham and Lord MacGregor, the noble Lord, Lord Carter, the noble Lord, Lord Dahrendorf, and other noble Lords.
	I join the chairman of the committee, the noble Lord, Lord Holme of Cheltenham, and my noble friend Lord Norton of Louth in regretting that it is now seven months since the report was published. Meanwhile, the Government are, quite unacceptably in my view, telling this House that they will use the power of another place to require this House to scrutinise and pass all stages of government legislation in fewer than 60 sitting days, which is a far shorter period than we have waited for this debate. I join my noble friend Lord Elton in criticising that. I was not entirely certain whether the noble Lord, Lord Carter, was offering an alternative or a complement to the 60 days; I shall have to re-read his words on that. I wait to see how the debate on the 60 days unfolds over the course of the next few months.
	One of the principles of the Gareth Williams reforms was that more time should be found for Select Committee debates. Yet three Select Committee reports have been awaiting debate since last July. Perhaps the seriousness with which the Government take Select Committees might be a subject for a further study by the noble Lord's committee, including what might be instructive post-report scrutiny into what notice the Government take of what is said.
	Having listened to the tone of this debate, I think that we all subscribe to the basic premise of the report: that scrutiny of legislation can and must be improved. I particularly agree with the report's remarks in Chapter 7, to which the Government, perhaps significantly, have not responded. The report states, in paragraph 221:
	"We have left to the end perhaps the most important point of all. That is, that quantity should not be confused with quality. There are imperatives within Government which have encouraged a significant growth in the volume of legislation".
	That was the point made by the noble Lord, Lord McNally. It was a good point when he made it, and it is worth repeating. Anyone who listened with a sinking heart to the dismal litany of Bill after Bill in the gracious Speech last month as the legislative gates opened again can agree on that. As Mr Tyler told the committee, Parliament passed more law in the past half-century than in the preceding four centuries put together, and the committee itself stated that the volume of new law in any year is now frequently twice that of before the 1990s. Only Ministers can call a halt to that, but have they the will to do so? The signs in this year's programme are deeply discouraging. That is not to mention the torrent of secondary legislation, which is now quite out of control. Parliament, perhaps through the new Joint Committee being set up by the Government on relations between the two Houses, must seek ways to limit those frequently life-changing decrees. So I very much support the view taken by the noble Lord, Lord Dahrendorf. The sense of the sunset clause is becoming increasingly undeniable. We should seek to further that in the months ahead.
	So I welcome the many wise prescriptions of the committee about quality, but I also agree that the real issue is quantity. We can use scrutiny to produce safer law, but what we really want is abstinence. Pre-legislative scrutiny, as exemplified in recommendations in the report, should be used on a wider scale. I am disappointed that the Government are not prepared to publish the reasons why they refuse to publish any non-emergency Bill in draft.
	I suspect that a frequent reason is worrying and obvious: Ministers have not got their thinking straight enough to publish a draft. Time and again rafts of amendments have been tabled late, when they cannot be given proper Committee consideration. We have seen whole new sections added to Bills; confused drafting; Bills in one Session to correct Bills in the previous Session; skeleton Bills on to which far too much unamendable regulation is attached; and, all too often, bone-headed refusal to listen to wise advice from parliamentarians not just in this House but in another place. All those things need to be put right. Pre-legislative scrutiny can help, but it will go only so far.
	While welcoming the main thrust of the report, I shall comment on aspects of the report about which I have some doubt. I support greater use of evidence-taking committees. The House has seen their value on both the Constitutional Reform Bill, where the committee's work was commended by the noble and learned Lord the Lord Chancellor, and the Assisted Dying for the Terminally Ill Bill. However, I question whether that procedure can be generally applied to Bills that have not had pre-legislative scrutiny.
	I also have doubts about the idea that Commons Select Committees should normally conduct pre-legislative scrutiny. The noble Lord, Lord Holme of Cheltenham, made that point. I believe, with him, that there is at least a risk of Select Committees in another place being sucked too much into the process of delivering the Queen's business and finding the free-ranging independence, which is the strength that they should bring to Parliament, being diluted.
	The report is right to ask for improvements in Explanatory Notes to Bills; for more effort to demonstrate clearly the effect of amending legislation on existing statute; and the case for regular reviews of legislation. Indeed, surely the wisest of many wise things that the report states is that insufficient thought is given to post-legislative scrutiny of Bills and their effectiveness. Dozens of Bills passed with great éclat by this Government are already moribund and obsolete. Sunset clauses could well be used on sections within Acts. That would also be of great value. I should like to have seen a far more positive and creative response by the Government to all those parts of the report.
	It has been a valuable debate. Many positive ideas have issued from the report and this evening's debate. I cannot end without saying how outstanding and essential is the part that this House plays in the scrutiny of legislation—without this House, much legislation would barely be scrutinised at all—although I also agree with those who said that sometimes we miss; we do not catch everything before it gets through. So I would be very cautious about accepting too easily any second-class status for this House in the process of pre-legislative scrutiny, especially if it is to be linked to a time limit. This is a House of Parliament; why should it not be equally engaged in pre-legislative scrutiny?
	The noble Lord, Lord Carter, challenged me to say something about the Salisbury convention. He referred to the letter that I sent him before the 1997 election, when we had a House that was largely hereditary and the Conservative Party had about 40 per cent of the membership. That House has now changed. As the noble Lord, Lord McNally, explained, the Parliament Acts ensure that the Commons can prevail. But those Acts have rarely been used since this House does not seek to wreck core government legislation. That remains the position.
	As I said, however, the House of the Salisbury convention does not exist any more. Today's House was created by this Government in 1999. Labour is now the largest party and no one sits by right of birth alone. Inevitably a different House will behave differently. The Government said at the time that it should be more assertive and so it has been. You cannot put the clock back to before 1999 or even as far back as 1945.
	I am one of those who very much welcome the strengthening of this House and believe that the process should go further. But while I still accept the essence of Salisbury—namely, that the principle of Bills foreshadowed in the manifesto should be honoured—in this changed world, we will not allow the doctrine of a single party's manifestos to override the powers of this House or the pledges given to this House in 1999. I think that that very much echoes what has been said by the noble Lord, Lord McNally.
	It is also worth noting that nothing within the Salisbury convention should stop this House from proposing, agreeing and improving amendments to manifesto Bills. After all, that is what we are for. The noble Lord, Lord Carter, should not be too po-faced about the manifesto. After all, only this afternoon the Government have broken a manifesto pledge. On 5 May, Labour's manifesto said on the EU Treaty:
	"It is a good treaty for Britain and for the New Europe. We will put it to the people of Britain in a referendum and campaign wholeheartedly for a 'Yes' vote".
	Note the verb "will". And of course that pledge has now been broken.
	I finish with one final thought. This debate has shown the value of discussing the role of Parliament and the legislative process. So, may we look forward—and I think that this is the point that the noble Lord, Lord McNally, was going to make—to an early debate on the important report by the noble Lord, Lord Puttnam, and the Hansard Society on the communication of parliamentary democracy? It was also mentioned by the noble Baroness, Lady Gould of Potternewton, and other noble Lords. I believe that both the Government and Parliament would gain from early consideration of it, as I am sure we could from the report that we are debating today.

Baroness Amos: My Lords, I begin by congratulating the noble Lord, Lord Holme of Cheltenham, on opening this important debate. I congratulate also the noble Lord, Lord Norton of Louth, on his work in chairing the committee during the inquiry. Both noble Lords bring considerable expertise to this subject. I also express my thanks to members of the Constitution Committee, some of whom spoke in the debate this evening, for conducting this inquiry.
	I am pleased to have been asked to give evidence to the committee. I have to say to the noble Lord, Lord Wakeham, that in giving evidence I reflected my views on the basis of my experience in this House.
	I have a strong belief in the need to make Parliament more effective, more transparent and more accessible. I am particularly pleased that there have been a number of recent reports on Parliament and the need for greater public engagement. Noble Lords who spoke this evening often made reference to this wider context in their remarks. We need to continue to look seriously at these wider issues, particularly the relationship between the two Houses, the best ways of working and how we can retain the best features of this House—in particular its flexibility and the elements of its culture of debating practice; for example, in the Committee stage of a Bill.
	However, I think that this House needs to be much more confident about looking at its practices and ways of improving them. In the time that I have been Leader of this House, I have been struck by the great defensiveness on all sides of the House about looking at our working practices. The House will have an opportunity to make a decision, for example, about whether it wants to elect a presiding officer who can be independent of government and stand up and reflect the views of this House and in particular its Back-Bench Members now that the Constitutional Reform Act is in place. I look forward to that debate as it will be an opportunity for this House to make its views clear.
	There is much that the House itself can do, if it is so minded, and in that respect I agree with the noble Lord, Lord Norton of Louth, that Parliament has a role to play that is independent of the role of government.
	The noble Lord, Lord Strathclyde said that he found the list of Bills in the Queen's Speech a dismal litany. I would take his comments much more seriously if he had ever expressed the same kind of enthusiasm about the Bills that were considered under a number of Conservative administrations. I am sure that the noble Lord did not take the same view then as he does now. I can only take his remarks as politically partisan.
	The Government are committed to strengthening parliamentary scrutiny and believe that good scrutiny leads to better legislation. But we also need to be realistic about the resources available both within Parliament and within government. It is important to recognise that governments are elected on the basis of manifesto commitments which they will want to carry out. Governments also have a responsibility to respond to new and sometimes urgent demands that arise. It is in that context that I recognise the points made by the noble Lord, Lord Dahrendorf, about Government initiating legislation. I must say that I do not necessarily agree with the noble Lord in his conclusions on the effectiveness or usefulness—in that context—of pre-legislative scrutiny. We have to get the balance right.
	The noble Lord, Lord Holme of Cheltenham, in his opening remarks, my noble friend Lord Carter and the noble Lord, Lord MacGregor, all talked about the importance of pre-legislative scrutiny, as did other noble Lords.
	The Government have significantly increased the number of Bills published in draft for PLS: 49 draft Bills have been published since 1997. I say to the noble Lords, Lord Holme and Lord Norton, with respect to the publication of Bills in draft, that we have to an extent become victims of our success. We have built up the number of Bills published in draft each Session so successfully that it would now be difficult to give any guarantees that we can continue the year-on-year increase. It is in that context that the response was drafted as it was.
	The number of Bills introduced in draft has risen from three in 1997-98 to 11 in 2003-04. That is an increase by a factor of four. I cannot promise to continue that rate of increase, but in no way does that take away from the commitment made to try and publish Bills in draft.
	It would also be important to touch on resources. It would present your Lordships' House with an unprecedented burden on available resources, including Members with which to people committees. I note my noble friend Lord Carter's point about the impact on resources, which is similar to the point that I made, while my noble friend Lady Gould made the comment that finding noble Lords to participate would not, in her view, be a problem.
	The response makes it clear that we will seek at least to maintain the proportion of Bills published in draft. We continue to be committed to pre-legislative scrutiny.
	On the criteria used to assess whether Bills should be published in draft, we look at the readiness of the Bill, the date by which it is required to be enacted, whether there is sufficient time for pre-legislative scrutiny before introduction and, of course, the overall needs of the legislative programme.
	The noble Lords, Lord Holme and Lord Strathclyde, and my noble friend Lady Gould were also disappointed that the Government had not accepted the recommendation that the reasons for not publishing a draft Bill should be outlined in the Explanatory Notes to a Bill. We carefully considered that but felt that it would inevitably become formulaic and thus serve no useful purpose. The reasons are usually time pressure, demands on parliamentary counsel and the priority of other Bills.
	However, we accept the committee's recommendation that Explanatory Notes that give effect to EU obligations should provide detail of the scrutiny history of the measure. We are happy to do that, not least because the members of your Lordships' European Union Committee and its sub-committees perform valuable work on behalf of this House in scrutinising legislative proposals from the European Union. It is right that their work will now contribute to the scrutiny of Bills that give effect to those proposals.
	The committee supports the principle of carry-over and endorses the view that there should be a rolling legislative programme. That is very welcome. We envisage using carry-over for a few Bills each Session, as appropriate. In this House carry-over is subject to the agreement of the usual channels.
	My noble friends Lord Carter and Lady Gould and the noble Lord, Lord MacGregor, talked about the possibility of moving from a sessional approach towards a rolling programme of legislation. I can see the arguments for that but I think that there would be some resistance to doing away with Sessions altogether. Understandably, the Opposition see the sessional cut-off as a control of the Executive. However, I note that many other parliaments do not have Sessions, without ill effect. I should take this opportunity to make clear that we have no plans to alter current procedure for State Opening or the Queen's Speech.
	My noble friend Lord Carter and the noble Lord, Lord Elton, mentioned the proposals in the Labour Party manifesto with respect to the 60-day cut-off for Lords consideration. The proposal reflects the longstanding parliamentary convention, endorsed by the Wakeham report, that Her Majesty's Government are entitled to have their business considered by this House in reasonable time. It is not a new idea; something like it is part of the constitution of many countries with two-chamber parliaments, and it featured in the abortive attempt to reform this House in 1968. It would have the beneficial effect of making governments less wary of starting serious Bills in this House and making it harder for departments—I shall mention no names—to continue rewriting their Bills until Lords Third Reading.
	If the noble Lord, Lord Elton, would care to look at the manifesto, he will see that the proposal refers to the House of Lords but is actually about the conventions between the two Houses. That is why the proposal is for a Joint Committee.

Lord Elton: My Lords, do I understand correctly that it is a two-way process and that the committee can also look at procedures down the other end of the corridor?

Baroness Amos: My Lords, discussions about the terms of reference of the committee are ongoing. Once they are drafted they will be subject to discussion through the usual channels. However, the manifesto will form the basis for those terms of reference.
	My noble friend Lady Gould and the noble Lord, Lord MacGregor, talked about the process by which draft Bills should be considered. The committee considered that draft Bills should normally be considered by a departmental Select Committee, with a Joint Committee appointed for big and complex Bills and where there is particular expertise in this House. The Government draw that recommendation to the attention of the usual channels because in the past the Opposition have taken the somewhat unrealistic view that there should be a Joint Committee for almost every draft Bill. The review of working practices group that I chaired favoured,
	"greater use of joint committees and of Lords' committees where appropriate".
	The important thing is to consider the appropriateness. I stand by the conclusion of the group on working practices.
	The noble Lord, Lord Norton of Louth, was disappointed that the Government had not accepted the recommendation that each Bill should, at some stage, be subject to detailed examination by a parliamentary committee of one or other or both Houses empowered to take evidence. We have already significantly increased the number of Bills that are subject to detailed scrutiny by an evidence-taking committee by publishing more Bills in draft. We are not convinced that it would be appropriate to commit all Bills that have not been scrutinised in draft to an evidence-taking committee after Second Reading, but we are willing to consider it case by case. I remind noble Lords that it is already open to Select Committees of this House and of another place to take evidence on Bills; indeed, those committees frequently do so.
	The noble Lords, Lord Holme of Cheltenham and Lord Norton of Louth, and my noble friend Lady Gould of Potternewton raised the issue of a business committee. The Government are not convinced by the arguments for a business committee. In this House, we are extremely fortunate to enjoy good working relations in the usual channels that serve the needs of all Members of your Lordships' House. I do not think that, at this point in time, there is a need to consider alternatives to a system that works so well. I am not sure that a business committee would add transparency or shift control. The assumption implicit in many contributions was that the Government had control of business in this House. The only response that I can give to that is, "I wish".
	Several noble Lords—in particular, my noble friend Lady Gould of Potternewton and the noble Lord, Lord Smith of Clifton—referred to the need to improve public engagement with Parliament. I must make it clear that we do not regard the involvement of the public as an optional extra. Most government Bills are the product of extensive public consultation, but we believe that there is a lot more that the two Houses can do to engage people in the legislative process.
	The Government share the committee's hope that greater use will be made of, for example, e-consultation. New technologies offer interesting new possibilities for engaging with the public, as was made clear in the example given by my noble friend Lady Gould of Potternewton.
	Many of those participating in the debate referred to the recent publication of the report of the Hansard Society commission chaired by my noble friend Lord Puttnam. I think that all noble Lords will have encountered the terrible lack of understanding of Parliament and its processes that is so widespread. Noble Lords will appreciate that I am suggesting not that the wider public is at fault for not knowing enough about us but that Parliament must work harder to connect with the public that it is bound to serve.
	The two Houses will want to consider carefully the recommendations of the report. The fact that my noble friend Lord Puttnam has been nominated to this House's Information Committee suggests to me that it is an issue that is not going to go away. I take the points made by the noble Lords, Lord Strathclyde and Lord McNally, that we should have a debate on the subject. How we do that is something that we would want to discuss through the usual channels.

Lord Elton: My Lords, before the noble Baroness abandons the question of public relations, could she say whether there is any hope that the Government will join in the effort that she is urging on Parliament and make Parliament more attractive to the media by making most of their policy announcements in Parliament rather than outside it?

Baroness Amos: My Lords, the Government make most of their policy announcements inside Parliament. Many of my colleagues around the Cabinet table are scrupulous about doing that. However, we must recognise the reality of the world that we live in, with 24-hour media that are hungry for information. Sometimes I observe with absolute horror the degree of misinformation on policy, not only in our written media but also in our broadcast media, before announcements are made in Parliament.

Lord Elton: My Lords, when the Minister says that most of the announcements are made in Parliament, is that for the first time or are they following releases to the press that give rise to this misinformation?

Baroness Amos: My Lords, two things go on. For example, ideas will be floated to generate public debate. Noble Lords will have seen that my right honourable friend the Secretary of State for Transport has put forward suggestions to inform public debate. The media have reported these as if they will actually happen. Sometimes the situation is double-edged: we call for a public debate on issues before we move to a point where we develop policy on them, but the process of engaging in the public debate often becomes an assumption that that is what the Government are going to do. How we balance that is very difficult.
	I have seen from my colleagues a recognition that Parliament has a very important role to play. Occasionally, in this House when we take through very difficult legislation, I am sometimes irritated by the number of Statements with respect to policy initiatives. But that is about the management of the business rather than about the fact that Parliament has an important place in terms of hearing about policy and responding to policy within Parliament.
	I have to say to the noble Lord, Lord Elton, that I find it very difficult to think of ways in which we can work to ensure that the media take what goes on in this House and the other place more seriously. That is not necessarily what the media want to hear or do.
	I was very pleased that the noble Lord, Lord Holme of Cheltenham, acknowledged the positive nature of the Government's response to the committee's recommendations on post-legislative scrutiny—a point that was also picked up by the noble Lords, Lord MacGregor, Lord Norton of Louth, Lord Dahrendorf and Lord McNally, and my noble friend Lady Gould. Parliament and government have a common interest in strengthening post-legislative scrutiny. From the Government's point of view, it could help to ensure that the Government's aims are delivered in practice and that the considerable resources devoted to legislation are committed to good effect.
	We have therefore been giving very close consideration to how post-legislative scrutiny can best be achieved. We have asked the Law Commission to undertake a study of the options. I can report to the House that the Law Commission included that project in its ninth programme, published on 22 March. It has been recruiting a lawyer to work on that project who has some familiarity with Parliament and the debates around post-legislative scrutiny. It expects to begin work in July with the intention of reporting a year later. The commission, as is its common practice, will consult widely during the course of its work.
	While we do not accept that the Explanatory Notes are the best place to put criteria for evaluating a Bill after implementation, we agree that departments should be clear about the purpose of a Bill and how they will evaluate the effectiveness of legislation once it is enacted.
	Perhaps I may pick up on two additional points that were raised in the debate. The noble Lord, Lord Smith of Clifton, came back to a point that he has raised many times with me on the scrutiny of Northern Ireland business. The noble Lord will know that we have established a Grand Committee procedure to look at that. We are looking at other ways of ensuring that Parliament can look at the detail of Northern Ireland business. I know that the budget for Northern Ireland is a particular concern. We will come back to noble Lords with some proposals on that.
	The noble Lord, Lord Strathclyde, could not resist making a point about the EU Constitution. All I would say to him is that we do need a constitution to vote on, and it is not absolutely clear where we are at this point. Even the noble Lord cannot disagree that discussion by leaders within the context of the European Council is necessary before a decision is made on the next step.
	The noble Lord, Lord Norton of Louth, asked a number of questions about the Government's response to Select Committee reports in this House and in another place. Indeed, he tabled a Written Question on this towards the end of May. The House of Lords Companion to the Standing Orders states that:
	"The government have undertaken to respond in writing to the reports of the European Union Committee, if possible, within two months of publication, and to the reports of other select committees within six months".
	The present version of the Cabinet Office guidance on departmental evidence and response to committees makes this clear. The response limit for the House of Commons is two months. I have been asked why these different practices have grown up between the two Houses. I understand that the longer deadline for responses to Lords committee reports than that for the Commons seems to be an accident of history. Separate undertakings have been given in the two Houses without reference to the practice of the other. Obviously that is not entirely satisfactory, but that is what has become custom and practice.
	I apologise for trespassing on the time of the House. I conclude by saying that it remains my view that the committee has made some very important recommendations which deserve further discussion. I hope that there will be opportunities to have that discussion in the course of this Parliament.

Lord Holme of Cheltenham: My Lords, the hour is late and I shall be brief. However, I have to say that my noble friend Lord McNally did not quite finish the quotation:
	The fault, dear Brutus, lies not in our stars,
	But in ourselves, that we are underlings".
	I have to say that even by the standards of the House, this has not been an underlings' debate. I have very rarely seen such a powerful combination of ministerial and parliamentary experience. Indeed, I believe that we have heard contributions from three noble Lords who qualify for the new description of "noble and scholarly".
	I thank in particular the noble Baroness the Leader of the House for her characteristically thoughtful and very full response to the debate. As the Leader of the House she has encouraged us to become more aggressive as parliamentarians and to take charge of our own destinies, and she is right to do so. But perhaps I may say to her that in her other incarnation as a member of the Cabinet, I think that the burden of what she heard this evening, to quote the typical school report, is that the Government must try harder.

On Question, Motion agreed to.
	House adjourned at eighteen minutes past nine o'clock.